The 2024–25 Federal Budget is framed around cost-of-living relief, housing supply, energy transition, workforce participation and compliance integrity. It delivers direct household assistance, targeted business incentives, modest structural reform and large investments in compliance, digital infrastructure and clean energy.
The Price is Right: Budget 2024–25
The Treasurer is promising that inflation will decline by 0.75% as a direct result of the 2024–25 Federal Budget initiatives including energy relief for all households, a boost to Commonwealth Rent Assistance, and the freezing of the maximum co-payment on the Pharmaceutical Benefits Scheme. This is a pre-election budget for the people with everyone getting a little something to ease cost of living pressures. Like the Price is Right gameshow, it will all come down to the price paid at the checkout. If the consumer price index returns to target by the end of 2024 off the back of the Budget initiatives as the Government anticipates, the Reserve Bank of Australia may be inclined to reduce interest rates. However, at this stage, the RBA is not expecting inflation to return to the target range of 2–3% until the second half of 2025, and to the midpoint in 2026.
The 2023–24 surplus has increased to $9.3bn but is expected to decline to a deficit of $28.3bn in 2024–25, driven primarily by the Stage 3 tax cuts. For business, the Government is picking winners through targeted public investment with its Future Made in Australia Framework that they are betting will pave the way for private investment in net zero transformation and the strengthening of Australia’s domestic economic resilience. For small and medium business, there is a little but not a lot – an extension of the $20k instant asset write-off until 30 June 2025 and a $325 rebate to eligible businesses towards 2024–25 energy bills. For foreign residents, the capital gains tax regime will be amended to broaden the type of assets subject to CGT and introduce a modified 365-day principal asset testing period. Those with large superannuation balances will be disappointed that the 30% tax on super earnings on balances above $3 million remains in place, this is set to commence from 1 July 2025.
Key measures include previously announced Stage 3 tax cuts, $300 energy bill relief for all Australian households and $325 for eligible small businesses applied as an automatic quarterly credit, student HELP debts cut by changing the way indexation is calculated from 1 June 2023 to the lower of CPI or WPI, an increase to Commonwealth Rent Assistance maximum rates by 10% from 20 September 2024, and a one-year freeze on the maximum PBS patient co-payment for Medicare card holders with a five-year freeze for pensioners and concession cardholders.
Individuals & families
Personal income tax cuts confirmed – From 1 July 2024
As previously announced, the Government has legislated permanent tax cuts for all Australian taxpayers from 1 July 2024. Relative to the previous Stage 3 plan, the redesigned cuts broaden the benefits of the tax cut by focussing on individuals with taxable income below $150,000. For rates, see Personal income tax rates from 1 July 2024.
Medicare levy low-income thresholds increase – From 1 July 2023
The Medicare levy low-income thresholds will be increased for singles, families, and seniors and pensioners from 1 July 2023. The increases to the thresholds take account of recent movements in the CPI so that low-income taxpayers generally continue to be exempt from paying the Medicare levy.
| Medicare low-income threshold | Threshold as at 30 June 2023 | Threshold from 1 July 2023 |
|---|---|---|
| Singles | $24,276 | $26,000 |
| Families | $40,939 | $43,846 |
| Single – seniors and pensioners | $38,365 | $41,089 |
| Family – seniors and pensioners | $53,406 | $57,198 |
| Family – for each dependent child or student | $3,760 | $4,027 |
$300 energy relief for households – From 1 July 2024
Households will receive a credit of $300 on their energy bills credited as automatic quarterly instalments across 2024–25. Energy relief will also be provided to eligible small businesses in the form of a $325 rebate. Costing $3.5bn over three years from 2023–24, the measure extends and expands the Energy Bill Relief Fund.
Capping indexation of HELP debts – From loan accounts that existed on 1 June 2023
As previously announced, the Government will cap the HELP indexation rate to be the lower of either the CPI or the Wage Price Index with effect from 1 June 2023. The change will apply to all HELP, VET Student Loans, Australian Apprenticeship Support Loans and other student support loan accounts that existed on 1 June 2023. By changing the calculation of HELP indexation from 1 June 2023, the indexation rate is reduced from 7.1% to 3.2% in 2023 and from 4.7% to around 4% in 2024. The change resolves an issue for more than 3 million Australians with a HELP debt when CPI indexation spiked to 7.1%.
| HELP debt at 30 June 2023 | Total estimated credit for 2023 and 2024* |
|---|---|
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
Superannuation on paid parental leave – From 1 July 2025
As previously announced, from 1 July 2025 superannuation will be paid on Paid Parental Leave payments. Eligible parents will receive an additional payment based on the superannuation guarantee as a contribution to their superannuation fund. This payment is in addition to changes increasing paid parental leave to 24 weeks from July 2025 and 26 weeks from July 2026.
Increasing commonwealth rent assistance – From 20 September 2024
The Commonwealth Rent Assistance maximum rates will increase by 10% from 20 September 2024. The measure will cost $1.9 billion over five years from 2023–24 and builds on the 15% increase in September 2023, taking maximum rates over 40% higher than in May 2022.
Improving aged care support
The Government will provide funding of $2.2 billion over the next five years to deliver key aged care reforms and continue implementing recommendations from the Royal Commission into Aged Care Quality and Safety, including an additional 24,100 home care packages in 2024–25. The commencement of the new Aged Care Act has been deferred to 1 July 2025.
Increased flexibility for carer payment – From 20 March 2025
The current 25-hour per week participation limit will be amended to 100 hours over four weeks, excluding study, volunteering and travel time, applying only to employment. Payments will be suspended rather than cancelled if limits are exceeded, and recipients may use single temporary cessation days.
Higher JobSeeker rate for partial capacity to work – From 20 September 2024
Eligibility for the higher JobSeeker rate will be extended to single recipients with a partial capacity to work of zero to 14 hours per week.
| Relationship status | Maximum payment per fortnight |
|---|---|
| Single with no children | $762.70 |
| Single with dependent children | $816.90 |
| Single 55 or older after 9 continuous months | $816.90 |
| Partnered (each) | $698.30 |
Freezing social security deeming rates – Until 30 June 2025
The Government proposes to freeze deeming rates until 1 July 2025.
| Deeming rate | Single pensioner | Pensioner couple |
|---|---|---|
| 0.25% | Up to $60,400 | Up to $100,200 |
| 2.25% | Amounts over $60,400 | Amounts over $100,200 |
Pharmaceutical Benefits Scheme co-payments – From 1 January 2024
PBS general co-payments will not be indexed between 1 January 2025 and 31 December 2025, with concessional co-payments frozen until 31 December 2029. From 1 January 2024, patients may pay up to $31.60 or $7.70 with a concession card.
Federal, state and territory governments focus on housing
Housing initiatives focus on private development, home ownership support, and crisis housing, including $1bn for crisis accommodation and a new $9.3bn National Agreement on Social Housing and Homelessness.
Domestic violence – From mid-2025
Almost $1bn over five years will permanently establish the Leaving Violence Program, providing up to $5,000 in financial support plus referrals, safety planning and assessments.
Superannuation & investors
Expanding CGT regime for foreign residents – CGT events on or after 1 July 2025
The CGT regime will be expanded to clarify and broaden taxable assets, amend the principal asset test to a 365-day testing period, and require notification for disposals exceeding $20 million. The measure aligns Australia with OECD standards and is estimated to raise $600 million over five years.
Business & employers
$325 energy relief for small business – From 1 July 2024
Around one million small businesses will receive $325 off energy bills as an automatic quarterly credit.
$20k small business instant asset write-off extended – 1 July 2023 to 30 June 2025
Small businesses with turnover under $10 million may immediately deduct eligible depreciating assets costing less than $20,000 per asset.
The Future Made in Australia initiative
A $22.7 billion initiative to support renewable hydrogen, green metals, critical minerals, and clean energy manufacturing, including production tax incentives from 2027–28 to 2040–41.
Film producer tax offset – From 2025–26
The Producer Tax Offset will be amended to remove minimum length requirements and the 20% above-the-line cap.
Small business support services
$41.7 million over four years to support payment times, mental health, franchising reform, and access to justice.
Government & regulators
Includes digital asset regulation, charity reporting extensions, $187 million for ATO counter-fraud, expanded compliance taskforces, levy reductions, delayed anti-avoidance reforms, payday super support, AML/CTF reform funding, and sustainability enforcement.
The economy
Growth is forecast at 1.75% in 2023–24, rising to 2.25% in 2025–26. Inflation is expected to return to target by late 2025, unemployment to remain below pre-pandemic levels, and wages growth to moderate.
| Tax rate | Resident individuals 2023–24 | Resident individuals 2024–25 |
|---|---|---|
| 0% | $0 – $18,200 | $0 – $18,200 |
| 16% | $18,201 – $45,000 | $18,201 – $45,000 |
| 30% | $45,001 – $120,000 | $45,001 – $135,000 |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Timeline of initiatives
| Budget measure | Application date |
|---|---|
| Tax cuts legislated | 2024–25 and later income years |
| Medicare levy threshold increase | From 1 July 2023 |
| HELP indexation cap | From 1 June 2023 |
| Instant asset write-off $20,000 | 1 July 2024 to 30 June 2025 |
| Energy bill relief | From 1 July 2024 |
| CGT foreign resident reforms | From 1 July 2025 |
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