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Analysis:
Analysis
14 May 2024
5 minute read

Australian Federal Budget 2024–25

On Tuesday 14 May 2024, Treasurer Jim Chalmers handed down the Federal Budget for the 2024–25 financial year

Australian Federal Budget 2024–25
3 MB PDF

 

A surplus is forecast for the 2023–24 financial year, before the budget balance returns to deficit in 2024–25 and beyond. Although a surplus of $9.3 billion in 2023–24 is now expected – revised up from a $1.1 billion deficit forecast just six months ago – the budget bottom line is forecast to be a cumulative $13.9 billion worse off over the four years to 2026–27.

The Budget centred on providing cost-of-living relief and investing in the Future Made in Australia Act to support medium-term economic growth. The result is a relatively large increase in government spending over the next four years, potentially putting further upward pressure on inflation.

The 2024–25 Budget includes two key centrepieces:
 

1. A range of measures designed to ease cost-of-living pressures

Measures announced prior to budget night:

  • Redesigned Stage 3 tax cuts 
  • Payment of superannuation on paid parental leave 
  • Wage increases for workers in a number of care sectors 
  • ‘Prac payments’ for teaching, nursing, and social work students  
  • Reducing the HECS debt of around 3 million graduates 

Measures announced on budget night:

  • Energy bill relief to the tune of $300 for all households and $325 for one million small businesses 
  • 10% increase in Commonwealth Rent Assistance 
  • Cheaper medicines 
  • Targeted support for JobSeeker recipients with a partial capacity to work 

 

2. Highlights of the Future Made in Australia Act

The Government unveiled plans to spend $22.7 billion over the next decade on initiatives like:

  • Production tax incentives to encourage the supply of hydrogen and critical minerals
  • Government support for domestic manufacturing of solar panels
  • Investment in PsiQuantum – an Australian-founded quantum computing company
  • Funds to support battery production and unlock renewable energy capacity

 

Additional announcements in the Budget include: 
 
  • A payment of $5,000 to help meet the costs of leaving a violent relationship 
  • Money to boost the number of skilled workers in the construction and housing sector, with 20,000 fee-free TAFE places including 5,000 places for pre-apprenticeships 
  • An additional $1 billion to help states and territories build more housing, and a further $1.9 billion in loans to help build 40,000 social and affordable homes
  • Funding to streamline and improve Australia’s approach to attracting foreign investment, with a focus on protecting the national interest 

 

Download the Federal Budget Tax Report 2024-25

Meet the team

David Watkins

Deloitte - Australia
David Watkins is the leader of the Deloitte Australia Tax Insights & Policy group. David has over 25 years’ experience in corporate income tax and international tax covering a wide range of tax issues across various industry sectors. David has worked in Malaysia, Singapore and New York. In his current role, David’s focus is on emerging tax developments and in particular, the Australian tax reform debate and the international process addressing Base Erosion & Profit Shifting (BEPS). The Tax Insights & Policy group is involved at various stages in these emerging issues including consultation and submissions, publications and presentations and assessing the impacts of tax law changes.
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Dr Pradeep Philip

Deloitte - Australia
Pradeep is the Lead Partner for Deloitte Access Economics. He has had a long and successful career in public policy, with deep expertise in economics and proven leadership experience. Pradeep has been a senior bureaucrat, working at the highest levels of public policy, across three jurisdictions in Australia. Pradeep’s experience includes: Director of Policy in the Prime Minister’s office, Secretary of the Department of Health and Human Services in Victoria, CEO of LaunchVic – a company established by the Victorian Government to promote start-ups and entrepreneurship – and Associate Director General of the Department of Premier and Cabinet in Queensland. He holds a PhD in Economics and Bachelor of Economics (Hons) from the University of Queensland.
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Cindy Perryman

Deloitte - Australia
Cindy is a Corporate Tax Partner in Deloitte’s Business Tax Advisory practice in Melbourne, Australia. She has over 20 years’ experience providing advice on corporate and international taxation matters. Having worked in senior roles in a multinational energy and resources company and within the Australian regulator, Cindy is well placed to understand client needs and provide commercially sound tax advice. Cindy has extensive experience in relation to financing issues, including thin capitalisation and the arm’s length debt test.
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Stephen Smith

Deloitte - Australia
Stephen is an experienced macroeconomist and Partner of Deloitte Access Economics. He leads the Macroeconomic Policy and Forecasting Group of Deloitte Access Economics, setting the firm’s house view on the Australian economic outlook. As the author of several Deloitte Access Economics subscription publications – including the flagship Business Outlook report – Stephen provides clients and subscribers with a detailed understanding of the Australian and global economic environment. He is a regular media commentator on economic issues and presents to Board and Executive audiences at many of Australia’s leading corporates. Stephen’s client work spans a broad range of topics including trade, tax and fiscal policy, residential property, financial markets, M&A transactions, productivity, economic reform, and international development. He is an expert in understanding, forecasting and communicating the outlook for the Australian economy, having spent the past two decades working at Access Economics and Deloitte Access Economics. From 2016 until 2019 he was the Lead Partner of Deloitte Access Economics with responsibility for managing the practice. Based in Canberra, Stephen holds a Master of International and Development Economics, along with undergraduate qualifications in economics, from the Australian National University.
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Cathryn Lee

Deloitte - Australia
Cathryn is a Partner in the Macroeconomic Policy and Forecasting team of Deloitte Access Economics. Cathryn has extensive experience as an economist in both the public and private sectors, having joined Deloitte Access Economics from the Commonwealth Treasury in 2016. Cathryn has a detailed understanding of the Australian economy, and expertise in economic forecasting and analysis. Cathryn has provided advice to government and private sector clients on a range of macroeconomic issues covering the Australian and global economies. Cathryn specialises in providing economic forecasts and advice for mergers and acquisitions, government budget and tax policy, international trade, and financial markets.
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