Federal Budget 24/25 – what does it mean for you?
Federal Treasurer Jim Chalmers this week presented the federal budget for 2024/2025. The Budget comes amidst a cost-of-living crisis, high inflation, struggles in the construction sector and an income election.
The challenge was always going to be around helping Australians cope with rising costs without further fuelling inflation. The Labor Government said it focussed on building more homes and easing cost-of-living pressures among other bolstering measures. It forecasts that with this Budget, inflation will drop to 3.5% by the end of June and to 2.75% by the end of the next financial year.
Here are some of the key measures that may impact you.
Housing
Improved infrastructure: the Budget includes $1 billion to go to states and territories to build and improve infrastructure that can support housing developments. This includes roads, sewers, energy, eater and community infrastructure (including improved public transport).
Boosting the construction sector: nearly $89 million will create 20,000 new fee-free TAFE training spots to encourage more workers into construction and housing.
Rent assistance: Commonwealth Rent Assistance will see maximum rates increase by 10%, on top of the 15% increase that came into play in September 2023.
Social and crisis/transitional housing: a $9.3 billion investment is dedicated to building and repairing social housing to address homelessness across states and territories. $1 billion will go to crisis and transitional accommodation for women and children escaping domestic violence. Nearly $2 billion will also help community housing providers access concessional loans to deliver more social and affordable homes.
Student housing: There will be a cap on the number of international student enrolments for universities each year. If a university wants to exceed this limit, it will be required to build purpose-built student accommodation to be used by both international and domestic students.
Budgeting
Energy bill rebate: every Australian household will receive a total of $300 rebate with $75 applied automatically each quarter.
Tax cuts: announced in January, the stage 3 tax cuts apply to Australians earning more than $18,200 per year. This calculator can help you understand how much you may save with the tax cuts.
Student fees: annual HELP/HECS/VET and Australian Apprenticeship Support Loans indexation is proposed to change from being based on the Consumer Price Index (CPI) to be the lower of the CPI or the Wage Price Index. This would be backdated to 1 June 2023, meaning a credit may be applied to debts. This Government calculator can show you how much you may save.
Nursing, midwife, teaching and social work students will be eligible to receive a weekly payment during their prerequisite practical placements from July 2025
Apprentices and trainees in fields with skill shortages, such as construction, will receive a boost in payment ($5,000 up from $3,000). Employers will also receive an additional $1,000 incentive to hire and train more people in these sectors.
Superannuation for new parents: from 1 July 2025 Superannuation will be paid during the government’s paid parental leave for 20 weeks.
Medication: PBS-listed medications will remain capped at $31.60 for Medicare card holders for the next year, or $7.70 for concession card holders and pensioners for five years.
Small businesses
Extending instant asset write-off scheme: this scheme allows small businesses with an annual turnover below $10 million to claim a tax dedication on new equipment (such as a vehicle or machinery) up to the value of $20,000. Speak to your accountant for more information.
Energy bill rebate: Eligible small businesses will receive a total of $325 rebate on energy bills, applied quarterly.
These measures may relieve some pressure for some people saving for a deposit to purchase a house, or for households with a mortgage. You can also reach out to discuss your situation to see if we could save you money. This could be help to set a plan to get you into your first home sooner, refinance to a loan better suited to your needs and goals or building your investment portfolio.
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Explore other FAQs and Facts
How to consolidate tax debt
Struggling with ATO tax debt? If you miss payments, the ATO may charge 11.36% interest on unpaid amounts. One option is to consolidate your tax debt into your home loan, potentially saving on interest, though refinancing costs apply. Speak with a mortgage broker to explore this option and avoid further penalties.
How is interest calculated on my home loan?
Mortgage interest is calculated daily based on the remaining principal, but the reduction of the principal isn’t linear. In the early years, a larger portion of each payment goes toward interest. However, by making additional repayments or using an offset account, you can reduce the principal faster and pay less interest over the life of the loan.
How do green home loans work?
As Australians seek to minimise their carbon footprint, green loans are becoming popular. These loans finance energy-efficient homes, renovations, and eco-friendly products like solar panels, EVs, and insulation. With potentially lower rates and flexible terms, green loans also boost property value, as sustainable homes attract more views and sell faster.
Dream Home Dilemma: Should You Build or Buy your home?
Deciding whether to build a new home or buy an established one is a major step in your homeownership journey. Each choice has its own set of pros and cons, from the opportunity to customise your space to the convenience of moving into an existing home. Understanding these differences can help you make the best decision for your future.
9 things to prepare before buying a home
To ensure a smooth property purchase, start by boosting savings and avoiding job changes three months before applying for pre-approval. Check your credit report for errors, consult a mortgage broker, and choose a conveyancer. Research locations, attend open homes, and arrange inspections. Contact me for expert guidance and loan pre-approval.
Your quick guide to guarantor home loans
Saving for a deposit can be challenging, but a guarantor home loan offers a solution. By having a guarantor, typically a parent or relative, cover part or all of the deposit, buyers could enter the property market sooner. With this support, you might qualify for a home loan with just 5% or even 0% savings.
Government opens up more housing assistance places
The federal government has expanded the Home Guarantee Scheme, offering an additional 50,000 places for 2024-2025. This includes 35,000 spots for first home buyers, 10,000 for regional buyers, and 5,000 for single parents. Eligible applicants can secure a home with a low deposit and avoid lender’s mortgage insurance.
Understanding Australia’s Major Banks’ Anti-Scam Platform
Seventeen banks, including the big four, have joined forces to combat scams with the Fraud Reporting Exchange (FRX). This innovative system enables near real-time communication between banks, allowing them to swiftly report and respond to fraudulent payments as they move across institutions, enhancing security for all customers.
7 steps to increase your borrowing power
Borrowing power can vary significantly based on financial circumstances and lender choice. While two friends with similar profiles might get approved for different amounts, you can take steps to potentially increase your borrowing power. These steps include reducing expenses, increasing income, reducing debt, lowering credit card limits, improving your credit score, saving a larger deposit, and consulting a broker.
How redraw facilities and offset accounts can save you money
Offset accounts and redraw facilities both reduce the interest on your home loan by applying extra funds. Redraw facilities lower interest while providing conditional access to your money. Offset accounts, acting like savings accounts, offer easier access and higher interest savings, despite potential fees. Choose based on your need for fund accessibility and flexibility.