Budget 2024-25 (2024)

Tax cuts for every Australian taxpayer

Australians keeping more of what they earn

The Government is delivering tax cuts for all 13.6million Australian taxpayers from 1July 2024 to ease cost‑of‑living pressures for middle Australia, return bracket creep, support women and boost labour supply.

From 1July this year, the Government will:

• reduce the 19percent tax rate to 16percent
• reduce the 32.5percent tax rate to 30percent
• increase the income threshold above which the 37percent tax rate applies from $120,000 to $135,000
• increase the income threshold above which the 45percent tax rate applies from $180,000 to $190,000.

Responsible cost‑of‑living relief for middle Australia

Australians are under pressure and tax cuts will help. The Government’s tax changes provide bigger tax cuts for more taxpayers, delivering meaningful cost‑of‑living relief to middle Australia without adding to inflationary pressures.

Returning bracket creep

The Government’s tax cuts return bracket creep and lower average tax rates for all taxpayers.

The changes provide taxpayers with greater protection against bracket creep, particularly low‑ to middle‑income taxpayers, and support the progressivity of the tax system.

Boosting labour supply with more benefits for women

The tax cuts will ensure Australians keep more of what they earn. Increases in take‑home pay will reduce disincentives for Australians to take on more hours of work. The tax cuts are expected to increase labour supply by 930,000hours per week, equivalent to around 25,000 full‑time jobs. This increase is driven by women and individuals in the low‑to middle‑income range, particularly those earning between $25,000 and $75,000.

All 6.5million women taxpayers will receive a tax cut in 2024–25, with an average benefit of around $1,650. This will increase the financial return from work and support participation.

Increasing the Medicare levy low‑income thresholds

The Government has increased the Medicare levy low‑income thresholds for 2023–24, ensuring more than onemillion low‑income taxpayers continue to be exempt from the Medicare levy or pay a reduced levy rate.

For more information on how these tax cuts work for you visit taxcuts.gov.au

New power bill relief

$300 energy rebates for every household

The Government is providing $3.5billion in energy bill relief for all Australian households and around onemillion small businesses.

From 1July 2024, more than 10million households will receive a total rebate of $300 and eligible small businesses will receive $325 on their electricity bills throughout the year.

This is estimated to directly reduce headline inflation by around 1/2 of a percentage point in 2024–25 and is not expected to add to broader inflationary pressures.

Support for renters

Boosting Commonwealth Rent Assistance

The Government is providing $1.9billion over fiveyears to increase maximum rates of Commonwealth Rent Assistance by a further 10percent.

This builds on the 15percent increase in September 2023 and will take maximum rates over 40percent higher than in May 2022 – a combined result of indexation and the actions of this Government.

Cheaper medicines

Safeguarding health outcomes

The Government is working to finalise the new Eighth Community Pharmacy Agreement, supported by up to an additional $3billion in funding, which will deliver cheaper medicines, improve patient health outcomes and secure a strong community pharmacy sector.

As part of the Agreement, instead of rising with inflation, there will be a one‑year freeze on the maximum Pharmaceutical Benefits Scheme (PBS) patient co‑payment for everyone with a Medicare card and a five‑year freeze for pensioners and other concession cardholders.

This change means that no pensioner or concession card holder will pay more than $7.70 (plus any applicable manufacturer premiums) for up to five years.

Supporting students

Debt relief for students

The Government will cut $3billion in student debt for more than 3million Australians.

This will provide relief for everyone with Higher Education Loan Program (HELP) and other student loan debt. The integrity and value of the student loan system, which has massively expanded access to tertiary education, will continue to be protected.

In response to the Australian Universities Accord, the Government will cap the HELP indexation rate to be the lower of either the Consumer Price Index or the Wage Price Index.

The Government will backdate this relief to all HELP, vocational education and training (VET) Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on 1June 2023.

A fair go for consumers

Better outcomes at the checkout

The Government is examining pricing and competition in the supermarket sector.

In January, the Government appointed Dr CraigEmerson to review the Food and Grocery Code. Dr Emerson’s interim report, released in April 2024, recommended the Code be made mandatory with penalties of up to 10percent of turnover for major breaches.

In February, the Government directed the Australian Competition and Consumer Commission to undertake a 12‑month inquiry to investigate pricing and competition in the supermarket sector to ensure Australians are paying a fair price for their groceries.

We have funded CHOICE for threeyears to produce quarterly price comparison reports to empower consumers to make informed choices about food and grocery purchases. The first report will be released at the end of June.

Harnessing the energy transition for consumers

The Government has committed $27.7millionto develop priority reforms to ensure consumer energy resources – including rooftop solar, household batteries, and electric vehicles – continue unlocking savings and benefits.

We also committed $1.8million to support energy retail market reforms. For example:

• enabling consumers to switch to a better deal with just ‘one click’
• preventing contracts rolling over to higher‑cost deals
• ensuring people receive the concessions and rebates they are entitled to
• reducing excess fees and charges.

Growing wages

Standing up for low‑paid workers

The Government has committed to funding the Fair Work Commission decision to increase award wages for aged care workers. This is on top of $11.3billion already allocated for the interim 15percent increase.

The Government has also committed to provide funding towards a wage increase for the early childhood education and care workforce, with details to be finalised following the Fair Work Commission processes currently underway.

Enhancing support services

Financial wellbeing and capability

Support will be boosted for Australians facing acute and urgent financial pressures with $138million to meet sustained high demand for crisis support including emergency relief, food relief and financial support services.

Freezing social security deeming rates

Social security deeming rates for financial investments will remain at current levels until 30June 2025. This will benefit approximately 876,000 income support recipients, including 450,000 age pensioners.

Paid placements for nurses, teachers and social workers

Around 73,000 students will receive $319.50 per week while undertaking mandatory placements.