Australian federal budget 2024: what we know so far and what to expect (2024)

On 14 May the treasurer, Jim Chalmers, will deliver his second full-year budget.

Chalmers has promised more cost-of-living relief in a budget that he says tackles inflation but sets Australia’s economy up for growth – neither scorched-earth nor a free-for-all of spending.

Here’s what we know already about what is in the budget.

Tax cuts and cost of living

The biggest element of the cost-of-living relief in the budget is the changes to stage-three tax cuts, a $359bn 10-year tax cut package announced by Labor in January and legislated in February with opposition support.

The package means all Australian taxpayers (earning over the tax-free threshold of $18,200) get a tax cut, doubling the benefit for an average income earner compared with the Coalition’s original stage three proposal.

Labor says 84% of taxpayers are better off under its proposal, although those earning more than $146,486 would have received more under the Coalition’s model.

There will be other cost-of-living measures the government claims won’t add to inflation, which might point towards extending energy price relief.

Jim Chalmers has poured cold water on the Economic Inclusion Advisory Committee’s call for jobseeker to rise to 90% of the age pension, although he and the finance minister, Katy Gallagher, have seemed more open on increasing rent assistance. Chalmers has confirmed there will be “additional steps” on poverty reduction and “new initiatives for housing”.

Education, skills and Hecs

The government will wipe $3bn from student debts by indexing Hecs and Help debts to the lower of the consumer price index or the wage price index, backdated to June 2023.

The government will also pay student teachers, nurses, midwives and social workers $320 a week during their mandatory work placements, starting from July 2025. These two measures are aspects of the government’s response to the Universities Accord, but there will be more in the budget.

The government has announced $90.6m to boost the number of skilled workers in the construction and housing sector, creating 15,000 fee-free Tafe places and 5,000 places for pre-apprenticeships.

School funding will also rise as the federal government negotiates with the states to cover the 5% funding gap, most recently offering to lift its share of funding from 20% to 22.5%. This is estimated to cost $6bn over five years, although Chalmers has been coy about whether estimates will be reflected in the budget or only be added after education and health agreements are finalised.


There is no question childcare workers will be receiving a pay rise in this budget – the only questions are how much and how it will be distributed. With the industry in crisis due to staffing shortages, which have been exacerbated by staff leaving to work in aged care after that sector’s pay rise win, the government is expected to make wage increases for childcare workers a centre piece of the budget.

But it’s unclear whether the government will pull the trigger on scrapping the activity test, which sets a subsidy rate based on employment. It has indicated it wants to get rid of the measure as part of its plan to make childcare in Australia “universal”, though it’s not clear whether it will happen in this budget.

Health and aged care

Public hospitals are expected to get more funding, as the federal government works to finalise a new five-year agreement with the states to start in mid-2025. The commonwealth has reportedly offered to lift funding by an extra $4bn in 2025-26 and $13bn over the whole five years.

The government is also increasing funding for its medical research future fund over 13 years, with $1.1bn for existing projects plus $150m million to investigate rarely survived cancers, and $150m towards reducing inequalities in the health system. A further $500m will go to other research schemes.

The government is also yet to outline its response to March’s aged care taskforce report, which suggested new ways to pay for the system – including asking Australians with more wealth to pay more for the cost of their care.

The health minister, Mark Butler, also announced $49.1m would go toward offering longer consultations of 45 minutes or longer for endometriosis sufferers.

Among a total of $15.4bn in “unavoidable spending” to continue programs from the previous government is money set aside for palliative care, cancer supports, public health chronic conditions, and alcohol and other drug treatments.

Defence and foreign affairs

The budget will confirm that Australia’s defence spending will increase from 2.1% of Australia’s economic output next financial year to 2.4% by 2033-34, driven by a range of big-spending projects including the Aukus nuclear-powered submarines.

There will be some cuts to programs, however, with the government announcing last month that it would free up about $73bn over 10 years by cutting, delaying or changing the scope of some defence projects.

Even after these cuts are taken into account, the government says it has committed a net increase of $50.3bn for defence over the next 10 years. This includes a net increase of $5.7bn over the immediate four-year budget cycle.

This immediate funding includes $1bn over the next four years for long-range strike, targeting and autonomous systems.

In foreign affairs, the government has promised $492m for the Asian Development Fund’s 2025-28 pledging round, to “help respond to the needs of the region and deliver transformative development projects across the Indo-Pacific”.


So far, western Sydney is the biggest winner in infrastructure after the minister, Catherine King, announced $1.9bn in funding for 14 road and transport projects. Those include road upgrades, planning projects and extra money for a business case to extend the train line into the city’s south-west.

Cyclists will also get a boost with $100m being set aside to build and upgrade bicycle and walking lines in cities and regional centres.

Canberra will also get a $50m injection to extend its light rail line from the northern suburbs past Parliament House and into the city’s south.

The nation’s capital are getting a good deal because $249.7m has also been announced for Australian Institute of Sport as the 2032 Brisbane Olympics inches closer.

The quarter of a billion-dollar sum will go towards refreshing the ageing site with new accommodation, an all-weather sports dome and a new training centre.

Beyond Canberra, road safety data from the states and territories will also be better harmonised with a $21m funding announcement to set up a national data hub.

Future Made in Australia

The government has announced funding for a range of projects under its Future Made in Australia policy, which aims to directly support Australian industry and innovation, particularly in green energy. These commitments include:

  • $1bn for the Solar Sunshot production of solar panels in the Hunter

  • $1bn to PsiQuantum to build the world’s first fault tolerant quantum computer in Brisbane

  • $840m for Arafura’s rare earth metals production in the Northern Territory

  • An export agreement to sell armoured vehicles made by the German defence manufacturer Rheinmetall

  • $566m over 10 years for GeoScience Australia to map what is under Australia’s soil and seabed

  • $400m in new loans to Alpha HPA for Australia’s first high-purity alumina processing facility in Queensland; and

  • $185m to Renascor Resources to fast-track the development of stage one of its Siviour Graphite Project in South Australia; and

  • $100m to speed up environmental approvals, including assistance for business.

Gender equality

The government has committed $925m for the leaving violence payment, a payment of $5,000 to help meet the costs of leaving a relationship. The existing trial will be extended and the new permanent program available from mid-2025.

The government has also said that parents will receive 12% superannuation – or about $106 a week – on their publicly funded paid parental leave from July 2025, full costings for which will be in the budget.

Indigenous affairs

The government has not foreshadowed any new major spending commitments in the Indigenous affairs space, but the budget will contain details and funding for several large programs in that portfolio that were recently unveiled.

The Closing The Gap commitments from February, including a $700m remote jobs program, and March’s announcement of a $4bn remote housing program for the Northern Territory, are expected to be the major components of the Indigenous affairs portfolio. Most of the new commitments in Indigenous affairs are typically contained in February’s Closing The Gap document rather than the May budget.

Attorney General’s Department

The government has pledged $161.3m to establish the national firearms register, and $11m for an app alerting Australians in real time if somebody tries to use their data to commit fraud.

The government will invest $166.4m to implement reforms to Australia’s anti-money laundering and counter-terrorism financing regime.

Australian federal budget 2024: what we know so far and what to expect (2024)


Australian federal budget 2024: what we know so far and what to expect? ›

What's in the budget? 1 July 2024 is the commencement date of the Stage 3 tax cuts and when individuals will start to see an increase in their take-home pay. $3.5 billion in energy bill relief from 1 July 2024, including a $300 rebate to all Australian households.

What are the new tax rates for 2024? ›

From 1 July 2024, the proposed tax cuts will:
  • reduce the 19 per cent tax rate to 16 per cent.
  • reduce the 32.5 per cent tax rate to 30 per cent.
  • increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000.

What is in the US budget? ›

The United States budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies.

What are the new tax changes for 2024? ›

For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

How much tax do I pay on $80,000 in Australia? ›

If you make $80,000 a year living in Australia, you will be taxed $18,067. That means that your net pay will be $61,933 per year, or $5,161 per month. Your average tax rate is 22.6% and your marginal tax rate is 34.5%. This marginal tax rate means that your immediate additional income will be taxed at this rate.

What are the three biggest expenses in the federal budget? ›

CBO: U.S. Federal spending and revenue components for fiscal year 2023. Major expenditure categories are healthcare, Social Security, and defense; income and payroll taxes are the primary revenue sources.

Which states pay the most federal taxes and get the least back? ›

Residents in Connecticut, Massachusetts, New Jersey and New York have some of the highest tax bills in the nation. They also pay thousands more in federal taxes than their state receives back in federal funding.

Where does our tax money go? ›

Major Areas of U.S. Government Spending
Government SpendingAmount Paid Out of $1 Tax Dollar
🚑 Medicare$0.14
⚔️ National Defense$0.13
💰 Income Security$0.13
📈 Net Interest$0.11
6 more rows
Apr 6, 2024

What are the projected 2024 federal tax brackets? ›

2024 Tax Brackets (Taxes Due 2025)
Tax RateSingleMarried filing jointly
10%$11,600 or less$23,200 or less
12%$11,601 to $47,150$23,201 to $94,300
22%$47,151 to $100,525$94,301 to $201,050
24%$100,526 to $191,950$201,051 to $383,900
3 more rows
Apr 9, 2024

What will the tax bracket be after 2025? ›

Other tax brackets will move higher after Dec. 31, 2025 as well, including: The current 12% rate rising to 15% The current 22% rate rising to 25%

What are the new tax rates for 2026? ›

Under the TCJA, the tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. On January 1, 2026, the rates return to their pre-TCJA amounts of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The income brackets to which those rates are to apply will also be different and are adjusted for inflation each year.

What are the current tax brackets? ›

2023 income tax brackets
Tax RateTaxable Income(Single)Taxable Income(Married Filing Jointly)
12%$11,001 to $44,725$22,001 to $89,450
22%$44,726 to $95,375$89,451 to $190,750
24%$95,376 to $182,100$190,751 to $364,200
32%$182,101 to $231,250$364,201 to $462,500
3 more rows

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