Treasurer Jim Chalmers has delivered his third Federal Budget, forecasting a surplus of $9.3 billion, handing out almost $2 billion to increase the maximum rate of Commonwealth Rent Assistance and delivering a prediction that inflation could return to target this year.
Presenting the Budget for 2024/2025, Mr Chalmers described it as a Budget for “the here and now”, as well as a Budget for the “decades to come”.
He said the government’s main priorities were to help Australians with the cost of living, to build more homes for Australians and to invest in the skills and universities needed to make it happen.
Strengthening Medicare, and providing responsible economic management in the face of “fragile global conditions” were also at the forefront of the Budget’s aims.
“This government and this Budget delivers for every Australian,” Mr Chalmers said.
“A tax cut for every tax payer, wages growth in every industry, a better deal for every working parent and a fairer go at every checkout.
“New help with energy bills for every household and for small business, stronger Medicare in every community, more homes in every state and territory, more opportunities in every TAFE and university.
“A dignified retirement for older Australians, energy and industry policies that help bring the jobs of the future to every corner of our country, an economic plan where growth and opportunity go together.”
Mr Chalmers said all 13.6 million Australian taxpayers would receive a tax cut, averaging $36 per week, while $3.5 billion would go towards $300 in energy bill relief for all Australian households and one million small businesses.
He said $3 billion in student debt would be waived for more than three million Aussies, while cheaper medicines would form part of the up to $3 billion agreement with community pharmacies.
There will be $2.8 billion allocated to strengthen Medicare, including a further 29 Medicare Urgent Care Clinics, along with $3.4 billion for new and amended listings on the Pharmaceutical Benefits Scheme and $2.2 billion to improve the aged care system.
Funding will also be set aside for increased aged care and child care wages, while $888.1 million will help people get the mental health care they need.
But Mr Chalmers said the Budget was framed in “fraught and fragile global conditions” and while the world economy was resilient, it was still “subdued”.
“Inflation is lingering in North America, growth is slowing in China and tepid in Europe,” he said.
“Tensions have escalated in the Middle East and they persist in Ukraine.
“Global supply chains are fragmenting.
“This uncertainty combines with cost of living pressures and higher interest rates to slow our economy, with growth forecast to be just 1.75 per cent this financial year, and 2 per cent next.”
Mr Chalmers said unemployment was tipped to rise to 4.5 per cent next year but Australia was among the best placed to manage the uncertainties.
He said annual inflation had more than halved from its peak in 2022 and was now lower than anticipated in the mid-year update.
“But we know that people are still under the pump,” Mr Chalmers said.
“That’s why we designed our cost of living policies to ease these pressures and take another three-quarters of a percentage point off inflation this year, and half a percentage point next year.
“Treasury’s now forecasting that inflation could return to target earlier, perhaps even by the end of this year.”
Only time will tell….. Here’s what’s in the Budget specific for real estate.
Addressing housing pressures
The Budget invests a further $6.2 billion in specific housing initiatives, taking the Government’s total new investment since 2022 to $32 billion.
This investment expands on initiatives already being delivered through the National Housing Accord, Housing Australia Future Fund and Social Housing Accelerator.
Supporting more homes
The government will deliver a further $1 billion to states and territories to deliver new housing – including for connecting essential services such as water, power, sewerage and roads.
This expands on the $500 million already committed through the Housing Support Program to support enabling infrastructure to unlock more homes.
More help for renters
A $1.9 billion investment will increase the maximum rates of Commonwealth Rent Assistance by a further 10 per cent to further alleviate rental stress.
This is in addition to the 15 per cent increase made in September 2023, taking the increase to Commonwealth Rent Assistance maximum rates to more than 40 per cent since May 2022 including indexation.
Almost one million households receiving the maximum rate of Commonwealth Rent Assistance, about one-quarter of all renters, will be better off.
More housing for students
To deliver more accommodation for students and to reduce pressure on the private rental market, the Government will work with the higher education sector to develop regulations requiring universities to increase their supply of student accommodation.
More housing support for vulnerable Australians
The Budget includes funding for a new five‑year, $9.3 billion National Agreement on Social Housing and Homelessness with states and territories.
Under the agreement, the Government will double its dedicated funding for homelessness services to $400 million a year – funding that states and territories must match.
The Government will also deliver a $1 billion increase for the National Housing Infrastructure Facility to support housing for women and children experiencing domestic violence and for youth.
The funding is being rebalanced to provide more up‑front grants to support states and territories and community housing providers to deliver more housing for these cohorts.
Other measures to support housing
- Providing $88.8 million for 20,000 new fee‑free TAFE places, including increased access to pre‑apprenticeship programs, in courses relevant to the construction sector.
- Providing an additional $1.9 billion in concessional loans to community housing providers and other charities to support delivery of new social and affordable homes under the Housing Australia Future Fund and National Housing Accord.
- Making a landmark $4 billion joint investment with the Northern Territory Government to improve conditions and address overcrowding in remote housing in the Northern Territory.
- Allowing foreign investors to purchase established Build to Rent developments with a lower foreign investment fee, conditional on the property continuing to be operated as a Build to Rent development.
