The Australian Federal Government’s 2024-25 Budget aims to balance cost of living relief with avoiding inflation. It marks a significant achievement, delivering consecutive surpluses for the first time in nearly two decades.
To meet these goals, the budget enacts the previously announced Stage 3 tax cuts, providing tax reductions to all taxpayers starting July 1, 2024. It also includes energy bill relief for households and businesses, increases Commonwealth Rent Assistance, extends the instant-asset write-off for small businesses, and offers debt relief for students.
This year’s budget allocates $11.3 billion for housing, comprising $9.3 billion for social housing and homelessness, $1 billion for crisis and transitional accommodation, and an additional 10 percent increase in Commonwealth Rent Assistance. These initiatives aim to boost the housing supply over the medium term.
While the budget addresses various key areas with a $90.6 million construction workforce package, it falls short of providing an immediate solution to increase the supply of new homes.
With the National Rental Affordability Scheme (NRAS) ending in 2025, there is uncertainty about the impact on current tenants.
The effectiveness of aligning fiscal policy with monetary policy to avoid fuelling inflation and potential rate hikes by the RBA remains to be seen. The expectation is that rates will stay steady through 2024 with a possible cut at the beginning of 2025.