Students, welfare recipients, and taxpayers are poised to reap significant benefits with the unveiling of the federal budget tonight by Treasurer Jim Chalmers. Despite Chalmers’ efforts to manage expectations by cautioning against extravagant spending, promising “there will not be big cash splashes in the budget, simple as that,” notable policies aimed at easing cost-of-living pressures and inflation are anticipated.
Some initiatives, such as stage 3 tax cuts and student debt relief, have already been disclosed, while the government has hinted at additional measures like welfare support and energy bill relief without divulging specific details. Here’s a glimpse of what to anticipate in the federal budget, along with an estimation of how individuals may benefit from these plans.
JobSeeker rate as advocated by the EIAC, potentially elevating it to 90 percent of the aged pension. This adjustment could result in a substantial increase in fortnightly payments, offering much-needed relief to recipients.
However, it is unlikely to include a revival of the baby bonus, as Chalmers has dismissed the idea of introducing a Howard-era-style payment for new parents. Instead, the focus appears to be on addressing broader welfare concerns and providing targeted assistance to those most in need.
While the specifics of the welfare support enhancements remain to be seen, they are anticipated to form a pivotal component of the federal budget’s initiatives aimed at fostering economic resilience and social equity.
Welfare Support Enhancements
Australians relying on welfare will likely witness an increase in their payments, with pensioners identified as one of the three target groups by the treasurer. A potential raise in the JobSeeker rate, recommended by the Economic Inclusion Advisory Committee (EIAC), is under consideration.
Chalmers acknowledged the significance of the committee’s recommendations, indicating that additional measures in the budget would reflect these proposals. Later in the week, he provided more insight, stating, “There’ll be additional help for people on pensions and payments and fixed incomes, and there’ll be additional help for people who are doing it tough.” Concrete details of these enhancements will be unveiled on Tuesday.
The nature of this additional support remains somewhat uncertain, though it could include a raise in the JobSeeker rate as advocated by the EIAC, potentially elevating it to 90 percent of the aged pension. This adjustment could result in a substantial increase in fortnightly payments, offering much-needed relief to recipients.
However, it is unlikely to include a revival of the baby bonus, as Chalmers has dismissed the idea of introducing a Howard-era-style payment for new parents. Instead, the focus appears to be on addressing broader welfare concerns and providing targeted assistance to those most in need.
While the specifics of the welfare support enhancements remain to be seen, they are anticipated to form a pivotal component of the federal budget’s initiatives aimed at fostering economic resilience and social equity
Student Debt Relief and Placement Support
Prime Minister Anthony Albanese and Treasurer Chalmers had previously hinted at forthcoming cost-of-living relief for students, and two policies have now been announced ahead of the budget, with more expected on May 14.
One of the announced measures, introduced on May 6, is the Commonwealth Prac Payment, designed to assist teaching, nursing, midwifery, and social work students during their workplace placements for their degrees. This payment, amounting to $319.50 per week, aims to alleviate “placement poverty” experienced by students. It will be means-tested and is projected to benefit approximately 73,000 students. However, it will not be implemented until July 1, 2025.
Another significant measure entails a change in the indexing method for HECS-HELP debt. Previously, student debts increased annually in line with inflation every June 1. Under the new system, debts will be indexed to whichever is lower between inflation and the wage price index. This adjustment, recommended by the Australian Universities Accord review, aims to prevent student debts from rising faster than their earning potential. Additionally, this change will be retroactive to June 1, 2023, resulting in a reduction in debt for individuals affected by the previous 7.1 percent increase due to high inflation. The new indexing method is projected to provide relief of approximately $3 billion to over 3 million individuals with student debt. Moreover, it will curtail this year’s projected hike, reducing it from 4.7 percent to 4 percent.
Further alterations to higher education are anticipated to be included in the budget, as Education Minister Jason Clare has hinted at additional responses to the Universities Accord to be disclosed on May 14. The Accord review presented 47 different recommendations, ranging from establishing a $10 billion future fund to revamping the university funding model and augmenting the number of fee-free places. The specific details of these forthcoming changes remain undisclosed at present.
Stage 3 tax cuts
The government’s flagship tax policy, will be a focal point of this year’s budget. Passed by parliament in February, these cuts aim to redistribute benefits towards low- and middle-income earners while still offering reductions for high earners. Intended to alleviate cost-of-living pressures and address bracket creep, they lower tax rates for the lowest brackets and raise thresholds for higher ones. Unlike the original plan, these cuts benefit all taxpayers and come into effect on July 1. Treasurer Chalmers hinted at additional tax reforms beyond these cuts, likely tied to business and investment under the Future Made in Australia program.
Superannuation Inclusion on Government-Funded Parental Leave
A policy announced earlier entails the provision of superannuation benefits during government-funded parental leave. While this move aims to narrow the gender super gap, which sees women typically having 25% less super than men, it won’t take effect until July 1, 2025. The budget, set to be unveiled on May 14, will reveal the associated costs of this initiative.
Continuation of Energy Bill Relief Expected in Upcoming Budget
The government has hinted at extending energy bill relief in the upcoming budget, similar to student debt relief. Prime Minister Albanese highlighted an existing policy, introduced in the 2023-24 budget, which offers eligible families up to $500 off their power bills and eligible small businesses up to $650. Albanese emphasized the importance of easing financial pressure on small businesses and families, suggesting that energy bill relief could be extended for another year. While energy bills are projected to remain stable or decrease from July 1, Albanese’s remarks indicate ongoing support for households and businesses in managing energy costs.
Government Boosts Anti-Domestic Violence Initiatives
Ahead of the budget, the government revealed $925 million in funding to aid individuals escaping abusive relationships, responding to widespread concern over escalating violence against women. Starting July 1, 2025, survivors will access up to $5000 in financial assistance, alongside safety evaluations and referrals. Additionally, $6.5 million will support a trial of online age verification technology, aiming to curb exposure to harmful content. Finance Minister Katy Gallagher affirmed ongoing commitment to the national plan to end violence against women and children, which has already secured $2.3 billion. Further investments, including $1 billion for crisis housing, are anticipated in the upcoming budget.
Other Budget Measures Revealed
The federal budget will encompass various measures, including:
- A $50.3 billion increase in military spending, elevating defence expenditure to 2.4% of GDP.
- Allocation of $314 million over two years to enhance safety at Services Australia centers, with a significant boost in security personnel.
- $1.9 billion allocated for 14 new and two existing infrastructure projects in Western Sydney, focusing on road enhancements.
- Establishment of a national firearms register with an investment of $160 million.
- Injection of $519 million into the Future Drought Fund to aid farmers and regional communities in drought preparation and climate resilience.
- Introduction of a $100 million fund for construction and upgrades of bike and walking paths, effective July 1, 2025.
- Addressing the skilled construction worker shortage through $90 million investment in 20,000 new fee-free TAFE and VET places and pre-apprenticeships.
- An additional $3.25 billion for the North East Link toll road project in Victoria.
- Allocation of $49.1 million to enhance specialist care for women with complex gynaecological conditions like endometriosis.
- Investment of $249.7 million for upgrades to the Australian Institute of Sport in Canberra.
- A comprehensive $11.3 billion housing package, including funds for social and affordable housing, crisis accommodations for domestic violence victims, and a significant social housing and homelessness agreement.
- Launch of 29 new urgent care clinics with an investment of $227 million.
