On May 14, 2024, the Government unveiled its latest Budget, likely the last before the upcoming election. With inflation, cost of living, and housing at the forefront, this Budget addresses significant economic challenges. At Freedom Planning, a leading financial advisory business in Cairns, Australia, we break down the key takeaways and what they mean for your financial strategy.
It must be noted that the measures announced in the budget are all subject to the successful passage of relevant legislation so are not yet finalised. Please contact Freedom Planning directly for the most up-to-date and accurate financial advice.
Economic Outlook and Financial Planning
Surplus and GDP Growth
The Treasurer announced a $9.3bn surplus for 2023-24, marking a positive economic stance. However, projected deficits loom over the next three years due to essential spending. Real GDP growth is expected to rise from 1¾% in 2023-24 to 2¾% by 2027-28. Despite a slight increase in unemployment to 4½% in 2024-25, the overall economic outlook remains optimistic.
Inflation Control
The Government forecasts that inflation will fall to the Reserve Bank’s target range of 2-3% by the end of 2024, easing cost of living pressures for Australians.
Superannuation Updates
Superannuation on Paid Parental Leave
From July 1, 2025, superannuation guarantee contributions of 12% will apply to all Commonwealth-funded paid parental leave payments. This change aims to enhance long-term financial security for parents.
Enforcement Activity and Unpaid Super
Additional funding from July 1, 2024, will strengthen the ATO’s ability to tackle fraud in the tax and superannuation systems. The Fair Entitlements Guarantee Recovery Program will also be recalibrated to pursue unpaid superannuation from insolvent employers.
Aged Care and Welfare Enhancements
Aged Care Reforms
The Government has committed $2.2 billion over five years to implement recommendations from the Royal Commission into Aged Care. This includes better wages for aged care workers, improved home care quality, and additional Home Care Packages.
Energy Bill Relief and Rent Assistance
The Budget allocates $3.5 billion for energy bill relief, offering a $300 rebate to households and a $325 rebate to eligible small businesses. Additionally, $1.9 billion over five years will increase Rent Assistance by 10%, addressing rental affordability.
Support for Carers and Job Seekers
Increased Flexibility for Carers
From March 20, 2025, Carer Payment recipients can engage in more flexible work, study, and volunteer activities, with participation limits increased to 100 hours over four weeks.
JobSeeker Payment Increase
Single recipients with partial work capacity will see a JobSeeker Payment increase of at least $54.90 per fortnight from September 20, 2024.
Income Tax and Small Business Benefits
Income Tax Cuts
Starting July 1, 2024, 13.6 million Australians will benefit from legislated Stage 3 tax cuts, providing much-needed financial relief.
Instant Asset Write-Off for Small Businesses
Small businesses with annual turnovers under $10 million can instantly write off assets costing less than $20,000 until June 30, 2025. This extension supports business growth and investment strategy.
Whether you’re aiming for retirement savings or creating passive income streams, a solid investment strategy is key to becoming financially free.
Financial Planning Suggestions
At Freedom Planning, we recommend taking proactive steps towards financial independence. Start investing early, build an emergency fund for unexpected expenses, and explore various investment options to achieve your long-term financial goals. Whether you’re aiming for retirement savings or creating passive income streams, a solid investment strategy is key to becoming financially free.
This year’s Budget presents numerous opportunities and changes that could impact your financial future. For personalized advice tailored to your needs, contact Freedom Planning, your trusted financial advisor in Cairns, Australia. Together, we can navigate these changes and help you achieve financial independence and security.
* Please note that this article is based on the information provided by the Budget document. The release date of this document is 15 May 2024. The content of this document is of a general nature only and does not consider your personal objectives, financial situation and/or needs. Accordingly, the information should not be used, relied upon, or treated as a substitute for specific financial advice. While all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Freedom Planning Pty Ltd nor its employees or agents shall be liable on any grounds whatsoever with respect to decisions or actions taken as a result of you acting upon such information.