Budget 2024 recap: 6 new cost-of-living measures that could help you

Treasurer Jim Chalmers officially announced the 2024–25 federal budget on 14 May, but what’s in it for you?

There’s a new tax cut for all Australians, an energy bill rebate and a freeze on the cost of medicines, just to name a few.

It remains to be seen what kind of impacts these cost-of-living measures will have on inflation, but for now, here’s a recap of what’s been announced.

Federal budget 2024: Key points

• Every Australian will get a tax cut, benefitting low and middle incomes the most
• Every Australian household gets a $300 power bill rebate
• Pharmaceutical Benefits Scheme (PBS) medications won’t cost more than $31.60
• Proposal to wipe $3 billion worth of student debt

Tax cuts for all Australians

• Low and middle-income earners benefit the most
• Those earning between $45,001 – $135,000 get a 2.5% tax cut

A headline feature of this year’s budget is the changes coming to stage three tax cuts, designed to offer some relief for Aussies feeling cost-of-living pressures.

While all Australians will receive a tax cut under the revised plan, the changes will benefit low and middle-income earners the most as they’ll see the biggest bump in their take home pay.

High-income earners who take home more than $135,000 each year won’t benefit as much as they would have under the former Coalition government’s plan, but will still receive a tax cut.

Here’s a look at what’s changing:

• Tax rate dropping from 19% to 16% for those earning between $18,201 – $45,000
• Tax rate dropping from 32.5% to 30% for those earning between $45,001 – $135,000
• 37% tax rate staying, but threshold increasing from $120,000 to $135,000
• 45% tax rate staying, but threshold increasing from $180,000 to $190,000

The government says Australians will receive an average tax cut of $1,888 in 2024-25.

Energy bill rebate – how much?

• $300 power bill rebate for every Australian household
• One million small businesses also eligible

In addition to the tax cuts coming on 1 July, the budget also includes energy bill relief – right in time for winter.

This announcement is an expansion of what we saw in last year’s budget, when the government offered a power bill rebate of up to $500 to pensioners, veterans, concession card holders and those on support payments.

In this year’s budget, every Australian household will get an energy bill rebate of $300 while one million small businesses will receive a discount of $325 on their power bills. The energy bill rebate will be delivered quarterly in instalments of $75, and come into effect from 1 July.

HECS-HELP debt relief – student savings

• $3 billion worth of student debt could be cancelled if passed in parliament
• Average student HECS debt could get around $1,200 wiped

The budget has detailed a plan to wipe away $3 billion worth of student debt from the Higher Education Loan Program (HELP). The debt relief would come as the government looks to legislate an overhaul of the HECS-HELP scheme.

In its current form, those paying off a student loan see their balance increase each year in line with the consumer price index (CPI), and in 2023, that method saw student debts go up by 7.1%.

The government now wants to reign in student HECS debt by capping the indexation rate at either CPI or the wage price index (WPI) – whichever is lower. If passed through parliament, the Federal government says the reworked scheme will be back dated to June 2023.

“Backdating it to mid‑2023 will cut indexation from last year in half,” said the treasurer.

In his speech on budget night, Chalmers said about 3 million Australians have a student loan, and that under a new scheme, the average person could get around $1,200 removed from their HECS-HELP debt.

The budget also includes a new payment for those studying teaching, nursing and social work while they undertake unpaid work placements as part of their studies. The payment will be $319.50 a week.

Medicines more affordable – capping costs

• Medicines on the PBS capped at $31.60
• Concession card holders won’t pay more than $7.70 for medication

The government is freezing the cost of medicines on the PBS for all Australians with a Medicare card, capping the cost at $31.60 for this year and next.

Concession card holders and pensioners get an even better deal, as they won’t pay more than $7.70 for their PBS medications for the next five years.

Making medicines cheaper is another cost-of-living measure, as the treasurer said on budget night that six out of 10 PBS scripts go to concession card holders and pensioners.

Housing shortage crisis – more homes added

• Goal of building 1.2 million homes by the end of the decade
• Billions to be spent on social housing, crisis accommodation and homelessness

The housing shortage crisis is looming large in the national conversation, and the federal government has an ambitious target of building 1.2 million homes by 2030.

As part of a mammoth $11.3 billion housing package, the government will provide $9.3 billion to the states and territories over five years to address homelessness, provide crisis support and build and repair social housing.

An additional $1 billion will be put towards building the roads, sewerage, energy, water and community infrastructure that is needed to support the homes and social housing in the pipeline.

The budget has also allocated $1 billion to crisis and transitional accommodation for women and children fleeing domestic violence, and youth.

This new funding adds to the $25 billion already set aside for new housing over the next decade, including social housing and affordable rental homes.

The treasurer also said on budget night that the government is providing an extra 20,000 fee‑free TAFE and vocational training places to help train construction workers.

More rental assistance – low-income renters to benefit

• Commonwealth Rent Assistance to increase by 10%
• An expansion of the 15% increase introduced in last year’s budget

The cost of rent has increased dramatically in many parts of the country, and the government is looking to ease the burden on low-income renters by increasing the Commonwealth Rent Assistance payment by 10%.

Rent Assistance is a regular extra payment available to Australians who are currently renting and receive government support. The treasurer said on budget night that the 10% increase comes in addition to the 15% increase that was already implemented in the previous budget.

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