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- 🦘 Outback Briefs: Special Federal Budget Edition
🦘 Outback Briefs: Special Federal Budget Edition
We had a big night yesterday with Jim Chalmers unveiling the Federal Budget 2024. In today’s newsletter, we’ll take a look at the most noteworthy changes in the budget!
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G’day everyone!
We had a big night yesterday with Jim Chalmers unveiling the Federal Budget 2024.
In today’s newsletter, we’ll take a look at the most noteworthy changes in the budget!
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2024 Budget: Relief Measures to Ease Living Costs Amid Economic Challenges
The federal budget by Treasurer Jim Chalmers targets key cost-of-living pressures with a mix of direct financial aids and longer-term economic strategies.
Key highlights include a $300 energy bill credit for households, a 10% hike in Commonwealth rent assistance, and a cap on PBS medicine prices, all designed to reduce immediate financial burdens for Australians.
The budget, which aligns with pre-election promises, also reflects a cautious optimism about controlling inflation, potentially encouraging the RBA to lower interest rates in the foreseeable future. This comes alongside tax cuts set for July, aimed at further supporting household finances.
On the spending front, the government plans to inject $11.7 billion in new measures in the 2024-25 fiscal year, with significant allocations towards renewable energy investments and housing programs.
Despite these optimistic measures, the budget outlines a sobering economic forecast with rising unemployment and modest wage growth expected over the next few years.
This mixed financial landscape underscores the government's attempt to balance immediate relief with long-term economic resilience, setting a cautious yet hopeful tone for Australia's economic path forward.
Federal Budget 2024: A Coffee's Worth of Tax Relief for Some as Tax Cuts Roll Out
The 2024 Federal Budget includes the much-discussed Stage 3 tax cuts, set to kick in from July 1.
While this overhaul promises to lighten the tax load for many Australians, the actual benefit varies significantly across income brackets.
For those on the lower end, the relief might just cover a weekly coffee, increasing by about $6 a week. For individuals earning $40,000, the increase amounts to roughly $12 weekly—enough for a fast-food meal.
At the upper end, the tax relief is more substantial but still falls short of earlier projections, with those earning higher incomes seeing around $86 more weekly, down from a previously expected $174.
This adjustment aims to distribute benefits more equitably among low and middle-income earners.
The new tax structure introduces cuts across several brackets, benefiting a broad swath of taxpayers.
Notably, the tax rate for incomes between $45,000 and $135,000 drops from 32.5% to 30%.
However, despite these cuts, the government's income tax take is forecast to rise in the coming years due to strong wage growth and employment - highlighting the ongoing challenge of managing fiscal policy amid economic growth.
Made in Australia: A $22.7 Billion Green Tech Gamble
Australia is throwing down $22.7 billion on a green tech revolution, aiming to snatch a piece of the clean tech pie from China's dominant grip on global supply chains.
This massive investment, detailed by Treasurer Jim Chalmers, targets the development of local industries essential for the transition to net-zero emissions.
These industries include lithium and rare earth processing, green steel production, clean hydrogen, and local manufacturing of solar panels and batteries.
While the ambition is high, the funds will roll out slowly, starting mid-2027 over ten years, pointing to the long-term nature of this bet.
The government plans to dish out $7 billion in tax credits for processing critical minerals used in various clean energy products.
There’s also a significant push for green hydrogen with an additional $6.7 billion in tax credits, betting on its potential to replace fossil fuels in heavy industries.
Additionally, the government will support the solar panel supply chain with a $1 billion Solar Sunshot scheme and $523 million for the Battery Breakthrough Initiative.
These efforts aim not just to make Australia a competitor but a leader in the green tech space.
Super Boost: $4,250 Superannuation Payment to Enhance Aussie Retirements
Starting July 1, 2025, Aussie families will see a significant boost in their retirement savings, thanks to a new budget measure that extends superannuation payments to parental leave.
This change, announced by Treasurer Jim Chalmers, involves the government shelling out $1.1 billion over the next four years to cover these super payments, with ongoing costs of $600 million annually thereafter.
This move is designed to make retirement savings more equitable and reduce the gender superannuation gap, benefiting around 180,000 families annually.
Families eligible for 20 weeks of paid parental leave, which will soon increase to 22 weeks and eventually to 26 weeks by July 2026, will receive a 12% superannuation payment on these benefits.
This adjustment translates to an extra $4,250 in a median-wage mother’s retirement fund, marking a 1.15% increase in their future nest egg.
The initiative targets both parents and is expected to significantly impact the superannuation shortfall many face due to career breaks for childrearing.
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