Federal Budget 2024 Summary

On 14th May 2024, Treasurer Jim Chalmers delivered the 2024 Federal Budget. Plans outlined a series of tax, superannuation and immigration measures, along with the Stage 3 personal income tax cuts. 

ActOn Wealth financial planners have undertaken a broad Australian Federal Budget analysis and provided the following headlines you need to know about. This is not an exhaustive summary, and we recommend you contact our team for an in-depth analysis of how government plans might affect you personally. 

2024 Federal Budget Highlights 

Federal Budget Tax Cuts – Brackets Are Changing 

Some Key Snapshots:

• Tax cuts commence 1st July 2024 and will save the average taxpayer $1,888 per annum and up to $4,529 a year for those in the highest tax bracket. 
• The 19% tax rate will be reduced to 16%.
• The 32.5% tax rate will be reduced to 30%. 
• The 37% tax rate threshold will rise from $120K to $135K. 
• The 45% tax rate threshold will rise from $180K to $190K. 
• None of these figures include the Medicare levy. 

ActOn Wealth Reaction: 

These tax cuts are an excellent opportunity to introduce cost-saving strategies without feeling the effects. Talk to our team of Melbourne financial planners today about how you can leverage this cut to grow your wealth. 

The following table captures the amount of tax payable in 2023/24 compared to the amount payable under this new Budget, with the final column detailing the tax savings. 

Medicare Levy Low-Income Threshold Increase

• Starting 1st July 2023 (note the backdate), thresholds for low-income singles, families, seniors and pensioners will rise. 
• Family income thresholds will also increase from $3,760 to $4,027 per dependent child. 

Cost of Living Relief – The Budget’s Big Focus 

Some Key Snapshots:

• Every Australian household will now receive a non-means-tested $300 energy bill relief payment, which is automatically credited to the next financial year’s electricity bills. 
• Approx 3-million Australians with student loans can expect an average reduction of $1,200 to their HELP, HECS, VET Student Loan, Australian Apprenticeship Support Loan or other student support loan account that existed on 1st June 2023.
• All Australians on a Medicare card can anticipate a one-year freeze on the maximum Pharmaceutical Benefits Scheme (PBS) patient co-payment 
• The freeze will last five years for pensioners and other concession cardholders, meaning they will not pay more than $7.70 (plus manufacturer premiums) per PBS medicine. 

ActOn Wealth Reaction: 

Preparing a cashflow and budget is a great starting point for any sound financial plan. The energy bill relief, PBS freeze and student loan reductions can all provide savings opportunities and help free up your cashflow. Our financial planners are here to help show you how to take full advantage of these and other Government updates. 

Superannuation Provides Opportunity For Growth 

Some Key Snapshots:

• From 1st July 2024, the super guarantee increases from 11% to 11.5% and will continue to rise in 0.5% increments until it hits 12% next year. 
• An additional 12% Government-funded Paid Parental Leave contribution to superannuation is available to eligible parents. 
• Employers can currently pay employee superannuation quarterly, but this will change from 1st July 2026, when super must be paid at the same time as salary and wages. 

ActOn Wealth Reaction: 

There’s some encouraging news in this budget for those whose superannuation is their primary wealth-building asset. How will you take advantage of these updates? Our retirement planning advice factors in these Budget updates and helps you make the most of your savings investments. 

Aged Care  – Focus On Attracting & Retaining Talent  

Some Key Snapshots:

• A five-year funding plan will aim to deliver a suite of reforms and recommendations from the Royal Commission into Aged Care Quality and Safety, including: 
• 24,100 extra home care packages released across 2024/25.
• Additional funding to secure and sustain aged care workers, deliver improved outcomes for service recipients and decrease My Aged Care Contact Centre wait times. 

ActOn Wealth Reaction: 

Our financial planners can provide specialist aged care financial services and advice. We help make approaching aged care a positive, confident time in your life. 

Small Business – Easing Overheads and Boosting Productivity 

Snapshot:

• A $20,000 small business instant asset write-off will be extended by another year until 30th June 2025. The asset threshold will remain applicable on a per-asset basis, allowing instant write-offs across many assets. 
• Eligible businesses will receive a $325 energy bill relief, applied automatically to electricity bills and implemented across quarterly instalments. 

Social Security – Savings For Seniors But Not Job Seekers 

Some Key Snapshots: 

• The current deeming rate freeze will extend for another year, remaining at 0.25% and 2.25% for the lower and higher rate respectively. As a result, retirees will benefit from interest rate and return increases without their pensions reducing. 
• The maximum rates for Commonwealth Rent Assistance will increase 10% from September 2024.
• Whilst the JobSeeker Payment rate will not increase, the eligibility criteria will be amended to allow for more people to receive payments. 

Contact Us For a Federal Budget Summary 

We hope this has given you a broad overview of the Federal Budget highlights and where you might be affected. Our financial planners are here to take advantage of positive changes and mitigate any adverse effects. Speak to us today about growing your wealth, irrespective of Federal government announcements. 

This blog post is provided for general informational purposes only and does not constitute financial advice. ActOn Wealth has made every attempt to ensure the accuracy and reliability of the information provided. However, the information is provided “as is” without warranty of any kind. ActOn Wealth does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained in this blog. No warranties, promises, and/or representations of any kind, expressed or implied, are given as to the nature, standard, accuracy, or otherwise of the information provided in this document nor to the suitability or otherwise of the information to your particular circumstances.

We encourage you to consult with a professional financial advisor for advice specific to your financial situation before making any financial decisions.