Federal Treasurer Jim Chalmers MP has presented the Australian Labor Party’s 2024-25 budget, which emphasizes alleviating cost of living pressures, increasing housing, investing in domestic manufacturing (under the initiative ‘A Future Made in Australia’), supporting education and skills development, strengthening Medicare, and enhancing the care economy.

Housing Initiatives

The Treasurer announced various housing measures, with the government committing an additional $6.2 billion, bringing the total new housing investment since 2022 to $32 billion. These measures include:

• A $1.9 billion investment to further increase the maximum rates of Commonwealth Rent Assistance by 10 percent, building on the 15 percent increase from September 2023, to help alleviate rental stress.
• Expanding financial access for community housing providers by raising the cap on the Government’s guarantee of Housing Australia’s liabilities by $2.5 billion to $10 billion and increasing the line of credit for the Affordable Housing Bond Aggregator by $3 billion to $4 billion.
• An extra $1.9 billion in concessional loans for community housing providers and charities to support the construction of new social and affordable homes through the Housing Australia Future Fund and the National Housing Accord.
• Allocating $1 billion for crisis and transitional accommodation for women and children fleeing domestic violence and for youth, through the National Housing Infrastructure Facility.
• Providing $1 billion to states and territories for infrastructure that supports new homes and additional social housing, including roads, sewers, energy, water, and community infrastructure.
• Committing $9.3 billion over five years through the National Agreement on Social Housing and Homelessness to address homelessness, provide crisis support, and build and repair social housing.
• Investing $90.6 million to increase the number of construction workers, with $88.8 million allocated for 20,000 additional Fee-Free TAFE training places to boost the construction and housing workforce.

Treasurer Chalmers said: “We’re easing the cost of living – and we’re building more homes for Australians. In the 5 years from this July, we aim to build 1.2 million of them.

“Our goal is ambitious – but achievable, if we all work together and if we all do our bit.

“[The] $6.2 billion in new investments mean our $32 billion Homes for Australia plan will:

• Clear local infrastructure bottlenecks.
• Provide more housing for students.
• Fund more social and affordable housing.

“And we will also deliver better transport for better access to suburbs, cities and regions.”

He emphasized that the budget includes an additional $1.9 billion in loans to support the construction of 40,000 social and affordable homes.

“We have also extended the national housing agreement, which was set to expire,” he stated.

He further explained that constructing new homes “will also create new community connections,” leading the government to invest in infrastructure and transport networks nationwide. This includes a new rail link connecting the Sunshine Coast and Brisbane, and $102 million to upgrade regional airports and remote airstrips, enhancing connectivity for remote communities to essential services.

Measures for SMEs

As expected, the government has announced the extension of the instant asset write-off, allowing businesses with turnovers of $10 million or less to deduct $20,000 from all eligible assets, for another year.

Originally set to expire on 30 June 2024, the scheme will now continue until 30 June 2025. The government will allocate $290 million to extend the $20,000 instant asset write-off for an additional 12 months.

Chalmers noted that this extension will provide “cash flow support worth $290 million for up to 4 million small businesses.”

Additionally, there will be $25.3 million allocated to improve payment times for small businesses and $23.3 million to promote the adoption of eInvoicing.

Chalmers also mentioned a further investment of $10.8 million in free, confidential financial and mental well-being support for small business owners, along with $625 million aimed at helping farmers and rural communities reduce emissions and better prepare for climate change and drought.

Moreover, the government is developing a ransomware playbook to guide businesses and individuals on how to prepare for, respond to, and recover from ransomware or cyber extortion incidents.

Energy Rebate

Over 10 million households will automatically receive a $300 rebate on their electricity bills, while eligible small businesses will get a $325 rebate throughout the year starting 1 July. These credits will be distributed in quarterly installments.

Digital ID

The government will allocate over $288 million over four years to expand the Digital ID scheme, which is used by many lenders. This expansion aims to reduce the amount of personal information businesses need to store.

Once fully operational, the expanded Digital ID System will decrease the administrative burden on small businesses by minimizing the ID data they must store and protect for their customers and employees.

Other Major Budget Measures

Additional budget measures announced to alleviate cost-of-living pressures include:

• Stage 3 tax cuts effective from 1 July 2024.
• Adjusting annual HECS indexation to the lower of the Consumer Price Index (CPI) or the Wage Price Index, retroactive to 1 June 2023.
• Starting 1 July 2025, paying superannuation on the government’s 20 weeks of paid parental leave.

Chalmers concluded: “Australia’s story is about more than the challenges we’ve faced. Our future should aim higher than merely getting by. This Budget acknowledges current pressures and holds an optimistic view of the future.

“It embodies our biggest ambitions and highest aspirations:

• To ensure Australians are the main beneficiaries in a changing world, tapping into their confidence, compassion, and creativity.
• To manage their pressures and maximize our advantages.
• To build a new economy and a new era of prosperity, making Australians and Australia more secure in the opportunities we create and the future we build together.”

The Treasurer forecasts inflation to drop to 3.5 per cent by the end of this financial year, 2.75 per cent by the end of 2024/25, and 2.5 per cent by 2026/27, largely due to rental and energy relief measures.

The Finance Brokers Association of Australasia (FBAA) and the Mortgage & Finance Association of Australia (MFAA) have both welcomed the housing measures.

source: The Adviser