Federal Budget 2024-25

Key Insights and Analysis from RSM

On Tuesday, May 14, 2024, Treasurer Jim Chalmers will deliver the Australian Federal Budget for the 2024-25 financial year.

This budget is projected to focus on advancing Australia's shift towards green energy by investing in renewable technologies and infrastructure to achieve net zero emissions goals.

The Australian Government has already announced changes to the Stage 3 income tax cuts which will come into effect on 1 July 2024. These tax cuts passed through the Senate in February 2024, and include changes to the income ranges and tax rates in the marginal tax brackets.

As the country eagerly awaits the 2024 Federal Budget, the Treasurer will deliver his speech on Budget Night and forecast the income and expenditure for the 2024-25 financial year. This will also include a review of the country's economy and a comparison of actual expenditure and income against the forecast from the previous year's budget.

RSM offers comprehensive coverage of the Australian Federal Budget, examining the issues and measures impacting Australian businesses, organisations, and individuals.

Subscribe to receive our insights and analysis on the 2024-25 Federal Budget >>

What to expect from the Australian Federal Budget 24-25

Company Tax Rates

The company tax rate is unlikely to change in the upcoming budget.
Small businesses currently face a tax rate of 25%, while larger companies pay 30% on their taxable income.
Business leaders should not expect wholesale changes to these tax rates.
Instead, the government is contemplating ways to use the tax system to incentivise private investment in the future of the Australian economy.

Cost-of-Living

There may be additional cost-of-living relief measures, but they are expected to be conservative and targeted

Australia's Energy Transition

Treasurer Chalmers emphasised that Australia’s energy transformation is central to the government’s goals and will be a focus of the 2024-25 budget. The budget will focus on supporting green energy industries as part of Australia’s energy transformation.

Given the global push toward net zero emissions, the budget is likely to allocate funds for transitioning to a greener economy.

Expect a focus on critical minerals, battery manufacturing, renewable hydrogen and ammonia, and green metals to meet net zero emissions targets.
Investments in renewable energy, sustainable practices, and climate change mitigation may feature prominently.

Tax Cuts

The Stage 3 income tax cuts have already been announced and will take effect from 1 July 20242.

Economic Stimulus

Targeted tax breaks and incentives are being considered to encourage private investment and boost the economy.

In addition to the topics the Treasurer has commented on, the 2024-25 Australian Federal Budget is expected to address several other areas. Other key topics of interest that are likely to be covered in the Federal Budget 2024 include:

Scope of Practice and Workforce Development

The budget may allocate resources to enhance the scope of practice for various professionals.

Workforce development initiatives could receive attention to address skill shortages and improve productivity.

Medicines Access

The budget might include measures to improve access to essential medicines.

Ensuring affordability and availability of medications could be a priority.

Defence Spending

The budget may announce additional spending on defence.
Areas such as the AUKUS nuclear submarine program and structural changes to defence forces could be addressed.

Infrastructure, Health, and Education

The budget traditionally allocates funds for infrastructure development, including roads, bridges, and public transport.

Healthcare and education sectors may also receive attention to improve services and facilities.

Economic Recovery and Cost of Living

The government aims to balance economic recovery with easing the cost of living for Australians.

Measures to stimulate economic activity and support households are likely to be part of the budget.

National Reconstruction Fund

A significant investment in manufacturing to support regions and create well-paying jobs.

Remember that these are expectations based on current available information, and the actual budget announcements may vary.

Federal Budget 2024 FAQ

What are the key components of the Federal Budget for 2024?

The Federal Budget for 2024 includes allocations for education, healthcare, defence, infrastructure, and social welfare programs. This budget aims to stimulate economic growth, support job creation, and address key national priorities. It reflects the government's financial plan for the upcoming fiscal year.

The 2024 Federal Budget is expected to focus on supporting economic growth and recovery, while also addressing key issues such as climate change and cost of living.

Will there be a surplus in the 2024-25 budget?

Despite challenges such as declining iron ore prices, the government has indicated that it is still aiming for a surplus in the 2024-2025 budget.

What are the three biggest expenses in the federal budget?

The three biggest expenses in the federal budget typically include social programs, healthcare, and defence spending. These allocations play a crucial role in supporting citizens, ensuring public health, and maintaining national security.

In the upcoming Federal Budget for 2024, we can expect continued focus on these areas while also addressing emerging challenges such as environmental protection and economic recovery. Stay tuned for the detailed breakdown after the official budget announcement.

What does the Australian government spend the most money on?

The Australian government spends the most money on social programs, healthcare, and defence. These areas receive significant allocations in the federal budget to support citizens' well-being, public health initiatives, and national security measures. The upcoming Federal Budget for 2024 is likely to prioritize these key areas while also addressing pressing issues like climate change and economic recovery. Stay informed for a detailed breakdown post-official budget release.

What is general revenue assistance?

General revenue assistance is a term used to describe financial support provided by the government to state and local governments. It includes grants and funding allocations that aim to assist in covering various expenses and services within their jurisdictions, such as education, healthcare, infrastructure, and public safety. This assistance plays a vital role in maintaining essential services and promoting balanced economic development across different regions.

In the context of the 2024 Federal Budget, general revenue assistance may feature as part of broader fiscal measures to support economic recovery and ensure equitable distribution of resources.

What are the largest items in the federal budget?

The largest items in the federal budget typically include social programs like healthcare, education, and welfare; defense and national security; interest payments on government debt; and infrastructure spending. These areas receive substantial allocations to meet the country's needs and priorities.

As the Australian government unveils its Federal Budget for 2024, it is essential to analyze how these major components are addressed and allocated within the overall budget framework to achieve a balance between immediate requirements and long-term goals. Stay tuned for a detailed breakdown of the key expenditure items post-budget announcement.

Where does Australia's tax money go?

Australia's tax money goes towards funding various government programs and services, including healthcare, education, defense, social security benefits, infrastructure projects, public safety, and environmental initiatives. These funds are crucial for sustaining the country's essential services and supporting its ongoing development and growth. Following the release of the Federal Budget for 2024, RSM's comprehensive breakdown will provide insights into how tax revenue is allocated to address national priorities and meet the needs of Australian citizens effectively.

What is the current budget stance?

The current budget stance reflects the government's approach to managing revenue and expenditure to achieve economic stability and growth. It outlines how much the government plans to spend, where it will allocate funds, and how it intends to generate revenue, including through taxes, borrowing, or other means. As Australia navigates its economic recovery and addresses key challenges in 2024, the budget stance will play a crucial role in shaping fiscal policies that support sustainable growth, job creation, and social welfare.

Stay tuned for updates on the Federal Budget's stance for 2024 as it unfolds.

What is the CPI forecast for the federal budget?

The CPI forecast for the federal budget is a key indicator that influences economic policies and budget planning. It helps determine the impact of inflation on consumer prices, wages, and overall cost of living. A detailed analysis of the CPI forecast for the Federal Budget 2024 will be crucial in assessing its implications on government spending, welfare programs, and economic growth strategies.

RSM Australia's economist will provide expert insights on how the CPI forecast shapes Australia's budget priorities and fiscal decisions in the coming year.

How much money is in the Australian Future Fund?

The Australian Future Fund currently holds approximately $220 billion, serving as a long-term investment fund to meet future obligations of the Australian government, including public sector superannuation liabilities. Its prudent management and diversified investment strategy aim to secure financial resources for future generations and support the nation's economic resilience.
To help you prepare for any impacts on your business, you can now sign up for RSM’s post-Federal Budget analysis of key measures and announcements, and what they mean for businesses, industries and the economy.