The essence of the 2024 Federal Budget is dominated by crowing about cost-of-living support.

Otherwise, it's a fairly milquetoast, restrained budget with few surprises around handouts for the average punter.

A lot of it seems like Groundhog Day - think rent relief and energy bill rebates.

Much of the key 'personal finance' policy items have already been teased out or made big news in the past few weeks, including:

On the top point, personal income tax collection is expected to increase a further $26 billion over the next five years despite the tax cuts, aided by a strong labour market, population growth, and wages growth.

The tax cuts have handed about 20 percentage points' worth of income tax bracket creep back to punters than would have been if the cuts had not been there.

@savings.com.au 💰 FEDERAL BUDGET: What you need to know 💰 Finance journo Harrison Astbury is out of the Canberra media lock-up with all the goss on the nation’s finances ⭐️ What are your thoughts? Drop your questions below! 👇 #budget #federalbudget #auspol #ausfinance #fintok #parliament ♬ original sound - Savings.com.au

Debt, deficit, and surplus

Broadly, the budget surplus experienced in 2022-23 is now narrower, at $9.3 billion predicted for 2023-24 - in-line with expectations.

Tricky 'mark to market' accounting measures mean various policy items can be held "off balance sheet", and ostensibly budget surpluses would have been non-existent without.

Ill-fated energy company Enron used mark-to-market accounting and look where that got it.

Gross government debt for this financial year is expected to be $904 billion.

Despite the government crowing about "restraint" and "responsible financial economic management", this will tip over the $1 trillion mark in 2025-26 and top $1.1 trillion in 2027-28.

As a percentage of GDP, that will go from 33.7%, to 35.1%, and then back down to 34.9% through the 2028 financial year as the economic malaise starts to turn.

While the rate of debt growth has been arrested from forecasts in previous financial years, debt has real-world consequences.

Someone with a tax bill of $20,000 per year (about the 'average' tax paid on a full-time wage) pays more than $700 of that towards interest on government debt.

The rate of growth on interest paid on government debt is now faster than NDIS spending.

Treasurer Jim Chalmers will be banking on interest rates to ease over the coming years so this doesn't risk further blow outs.

Treasury expects GDP growth to be just 2% in this upcoming financial year, before boosting by a quarter of a percentage point each financial year through 2027.

The unemployment rate is expected to peak at 4.5% over the next three financial years, while inflation is expected to proportionately slow to 2.75%.

These figures show that the government's bullish inflation figure is largely contingent on sluggish economic growth and a rise in unemployment, trending a little more negative than RBA forecasts.

$300 energy bill rebate

From 1 July 2024 an estimated 10 million households will receive an energy bill rebate of $300.

Small businesses can receive up to $325.

These are expected to be delivered over the proceeding few months and, like previous years, will apply directly to the customer's energy bill, confirmed by Treasurer Chalmers to the Press Gallery.

For example, if billed quarterly, customers will receive $75 per quarter.

It's estimated to cost the budget $3.5 billion.

This adds to various state government initiatives, such as Queensland's $1,000 rebate.

Budget documents estimate federal energy bill initiatives have reduced headline inflation by half a percentage point this financial year.

Underlying inflation - what the RBA looks at - would cut through the noise and omit these short-term price impacts.

Higher rates of Jobseeker for some

The government is extending eligibility for the existing higher base rate of the JobSeeker Payment to single JobSeeker Payment recipients with an assessed partial capacity to work between zero and 14 hours per week.

Combined with a higher rate of the Energy Supplement this will provide an increase of at least $54.90 per fortnight for these recipients - estimated to be around 5,000.

It's designed to address a gap in the welfare net, for those "with barriers to employment who have limited or no capacity to work due to their condition - but who do not qualify for Disability Support Pension".

This will apply from 20 September 2024 - the usual time JobSeeker and social services payments are indexed to inflation.

The higher JobSeeker payment rate is currently provided to single recipients with dependent children and those aged 55 and over who have been on the payment for nine continuous months or more.

The aim is to soften the cost-of-living blow to those underemployed - those employed but seeking more hours than they can get. Underemployment currently tracks about two to three percentage points higher than the unemployment rate.

Underutilised labour force participants affects about one-in-10 of the labour force.

Boosted rent assistance and market reform

Commonwealth Rent Assistance will be boosted by a further 10%, adding to the 15% announced in September 2023.

For a single parent with one or two children, the rate will have been boosted by $70 a fortnight since May 2022.

This round of rent assistance applies to approximately one million households and will cost the budget about $1.9 billion.

The government is also expected to introduce federal minimum rental standards market-wide. This will also see a more unified approach in what constitutes reasonable grounds for eviction, and the government will also seek to limit rent increases to once per year.

Super on Paid Parental Leave

Without a doubt one of the biggest policy tweaks for parents will be adding superannuation payments onto the paid parental leave scheme.

Under the scheme, parents - regardless of gender - can access up to 20 weeks' paid parental leave, and this can be distributed to each parent how they wish.

The government will provide $1.1 billion to make superannuation guarantee (SG) equivalent payments on their government-funded Paid Parental Leave (PPL).

So far, detail on delivery of these items is light - expect more information in the coming days and weeks.


Advertisement

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
*Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
*Rate varies on savings amount

Save Account (<$100,000)

  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace

Savings Account (Amounts < $250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • For deposit amounts $0 - $49,999
  • New ING personal savings customers receive an introductory bonus 0.50% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
  • Reverts to variable ongoing rate. T&Cs apply.

Savings Accelerator (Amounts < $50000)

  • For deposit amounts $0 - $49,999
  • New ING personal savings customers receive an introductory bonus 0.50% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
  • Reverts to variable ongoing rate. T&Cs apply.
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of August 21, 2024. View disclaimer.

Important Information and Comparison Rate Warning

Image coutesy of Jim Chalmers on X