Federal budget Summarized

I read the Federal Budget so you dont have to

Economic and fiscal outlook
Australia’s real GDP is forecast to grow 2 per cent in 2024-25, and the inflation rate is expected to average 2.75 per cent in 2024-25.

Here are some of the Winners and Losers:

Winners:
Low-income renters
The Australian government has announced significant boosts to rental support for low-income individuals receiving certain welfare payments. The Commonwealth Rent Assistance program will see a 10% increase in maximum rates for nearly one million households renting in the private or community market. This follows a 15% increase last year. The average recipient, paying around $590 in rent fortnightly, currently receives about $158 in rent assistance. The government plans to spend $1.9 billion over the next five years to raise maximum rent assistance rates. However, this assistance only extends to those on welfare payments or receiving means-tested family tax benefits, leaving out renters who don't fall into these categories. This measure aims to provide much-needed help to those struggling financially, particularly amid a national crisis marked by over 10% increases in rents in 2023.

Small businesses
Around one million small businesses will score a $325 rebate on electricity bills, adding to the household energy bill relief. Plus, the instant asset write-off scheme keeps going strong. Businesses with a turnover under $10 million can instantly deduct the full cost of eligible assets up to $20,000 until June 2025. And guess what? You can do this for multiple assets.

Those with student debt
The government is making waves by capping the indexation of student loans to either the consumer price index or the wage price index, opting for the lower of the two. This move, cutting around $3 billion in student debts, will backdate to mid-2023, undoing last year's 7.1% indexation increase. On average, individuals with student debt will save $1,200 thanks to this initiative.

Pensioners, cancer patients and Australians requiring PBS medicines
Medicare cardholders with prescriptions will enjoy a year-long freeze on Pharmaceutical Benefits Scheme (PBS) medicine costs, while pensioners and concession cardholders will see their co-payment costs frozen for five years, backed by a $469.1 million subsidy. Moreover, $3.4 billion will be allocated to listing new medicines on the PBS, notably for cardiac disease and breast cancer treatments, dramatically reducing treatment costs for the latter. Additionally, $1.4 billion will be invested in the Medical Research Future Fund over 13 years, with a focus on low survival cancers and tackling health disparities.

Losers:
Renters on average incomes and aspiring homeowners
The government acknowledges the severity of the housing crisis, with rents soaring, property ownership becoming unattainable, and construction falling short of targets. However, the budget offers little immediate relief or optimism for middle and high-income renters.

Structural changes like reforming negative gearing are absent, leaving aspiring homeowners without hope for a shift in the market dynamic. While the government is investing billions in home construction initiatives, significant relief is not expected until the end of the decade. Consequently, renters and potential homeowners will continue to endure the burden of the housing crisis without significant near-future solutions.

Tax dodgers
The Tax Avoidance taskforce, extended for two more years until July 2028, will intensify scrutiny on multinationals, large companies, and high-wealth individuals, with the aim of bolstering tax revenue.

This extension, costing $1.2 billion over five years, is projected to generate an additional $2.4 billion in taxes. Additionally, foreign residents in Australia will face a stricter capital gains tax regime, aligning more closely with what Australian residents pay. These changes are expected to yield $600 million in tax revenue over the next five years, with an $8 million investment in implementation.

International students
The Australian government's budget introduces a cap on international student numbers at universities, addressing concerns about declining revenues from this high-fee-paying group, which traditionally subsidizes costs for local students. To regulate these caps, universities will need to build more student accommodation alongside any increase in international student enrolments. Treasurer Chalmers emphasized that universities must construct additional housing if they intend to admit more international students.

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