Federal Budget 2024: Everything you need to know ahead of Budget day

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Katina Curtis
The Nightly
4 Min Read
Treasurer Jim Chalmers during early morning television interviews at Parliament House in Canberra, Sunday, May 12, 2024. (AAP Image/Mick Tsikas) NO ARCHIVING
Treasurer Jim Chalmers during early morning television interviews at Parliament House in Canberra, Sunday, May 12, 2024. (AAP Image/Mick Tsikas) NO ARCHIVING Credit: MICK TSIKAS/AAPIMAGE

Anthony Albanese has promised voters will see a “true Labor Budget” on Tuesday night – one that helps people now and invests for the future.

The Prime Minister told his colleagues at a meeting in Canberra on the eve of the Budget that it would be one they should be proud to have produced.

“That’s what Labor governments always do: deal with the urgent necessities that we have to deal with, things that we’re confronted with, but always with our eye on a better future,” he said.

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“Tomorrow night … I’m sure that each and every one of you will be very glad that we’re in this end of the corridor (in government) because this means that we can make a difference for the people that we want to represent.”

He also took a swipe at Opposition Leader Peter Dutton, who will get his chance to respond to the Budget on Thursday.

Mr Albanese said there was yet to be “a fully costed policy on anything” from the Coalition and if Mr Dutton failed to include one in this, his third budget reply, “it will be strike three in their credibility as an alternative government”.

The Government also has a lot riding on its credibility with this Budget – the last one with any distance from an election expected to be held early next year.

Economic position

The political stakes were heightened when Treasurer Jim Chalmers revealed the inflation forecasts from Treasury are much rosier than those released by the Reserve Bank a week ago.

He is now expecting inflation to be brought back into the target range of 2-3 per cent by the end of 2024.

This starkly contrasts with the RBA’s forecasts that inflation will tick up slightly by the end of the year on the back of higher petrol prices, and not reach the target range until late 2025.

The news is less rosy for the broader economy, with the forecasts for growth downgraded both from last year’s budget and the mid-year update.

Tuesday’s books will predict real GDP growth to be 2 per cent on 2024-25 and 2.25 per cent the following year as the global economy slows.

But the Government is cautioning on both fronts that economic forecasting is difficult at the best of times – and global uncertainty means we are far from the best of times.

State of the budget

Dr Chalmers has been pointing to a small surplus for the year, but cautioned that an already-slowing economy means the windfall revenue upgrades are far, far lower than in previous years.

However, decisions over the past two Budgets to bank the bulk of those windfalls means gross debt will be $152 billion lower in 2023-24 compared with the pre-election forecast.

This means debt peaks below $1 trillion and saves taxpayers $80 billion in interest costs over a decade.

Finance Minister Katy Gallagher has found another $27.9 billion in savings and “reprioritisations”, meaning money is moved from one program in a portfolio to another.

The bulk of this – some $22.5 billion – is in Defence after the change in strategic direction meant some projects were cut or deferred to make space for others.

However, she has also pointed to $15.4 billion in unavoidable spending needed to continue programs such as cancer and palliative care and IT support for government systems.

Help now and investing in future

The twin centrepieces of the Budget will be cost of living support and the Future Made in Australia strategy.

Dr Chalmers has repeatedly laid out the tricky balancing act he faces of helping people struggling with higher prices while making sure he doesn’t worsen inflation.

The upbeat inflation forecasts suggest he is confident the support in the Budget will make a measurable difference, as did last year’s power bill rebates and childcare fee subsidies.

The reworked $107 billion tax cut plan – now going to all 13.6 million taxpayers unlike the Coalition’s original version – will be the largest cost-of-living measure.

However, Dr Chalmers has said pensioners and people on welfare will not miss out either.

He’s also expected to reheat some form of the power bill support.

Some $3 billion student HELP debts will be written off and indexation arrangements changed while teaching, nursing and social work students will be paid for the practical placements they must do as part of their qualification.

And housing gets another boost with an $11.3 billion package – not all of which is new money – to increase supply and help the states move faster including on social housing and crisis accommodation.

There is also money being set aside for a boost to the wages of childcare and aged care workers plus ongoing funding to add superannuation to paid parental leave.

On the Future Made in Australia front, less is known about the specifics to be unveiled on Tuesday.

Mr Albanese and Dr Chalmers had said the point of the package is to unlock private investment, although some public funding will be on the table too.

This is expected to mean a combination of tax incentives, grants, loans, equity injections and creating the infrastructure needed to get projects off the ground.

Already the Government has allocated money to its Solar Sunshot program for domestic solar panel manufacturing and joint funding with the Queensland Government to build the world’s first fault-tolerant quantum computer.

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