Last night, Treasurer Jim Chalmers handed down the government’s third budget, with a $300 power bill boon for every Australian household.
Have a look at this cheat sheet of what’s new in this year’s budget — and what’s in it for you.
TAXPAYERS
From July 1 every taxpayer will receive a tax cut following changes announced by the federal government earlier this year. It means workers in every tax bracket will pay less income tax – see below table.
Earn up to $18,200 – pay no tax
Pay a 16 per cent tax rate on each dollar earned between $18,201-$45,000
Pay a 30 per cent tax rate on each dollar earned between $45,001-$135,000
Pay a 37 per cent tax rate on each dollar earned between $135,001 — $190,000
Pay a 45 per cent tax rate on each dollar earned above $190,000
The reforms reduce the 19 per cent tax rate to 16 per cent, reduce the 32.5 per cent tax rate to 30 per cent, raise the threshold at which the 37 per cent tax rate applies from $120,000 to $135,000 and raise the threshold at which the highest rate of 45 per cent applies from $180,000 to $190,000.
PARENTAL LEAVE SUPERANNUATION
Superannuation will now be paid on top of Commonwealth-funded paid parental leave from July next year.
Superannuation has been raised as a key issue contributing to pay inequity between men and women, who typically access more parental leave, with the loss of the super payments during that time contributing to smaller savings on average at retirement.
It builds on the government’s plan to increase the amount of paid leave new parents can take under the Commonwealth scheme to 26 weeks by mid-2026.
STUDENT DEBT
People with HELP debts, VET student loans and Australian Apprenticeship Support Loans and other student loans will have their debts reduced as the federal government changes how the loans accrue interest.
Pending a legislative change that must be passed through parliament, student debts will grow each year at the rate of either the consumer price index or the wage price index — whichever is lower.
This change will also be backdated to June last year, meaning loans for that year will grow at the lower wage index rate of 3.2 per cent instead of the 7.1 per cent inflation rate they were measured at.
BUSINESS ASSET WRITE OFF
The popular instant asset write-off scheme allows small businesses with an annual turnover below $10m to claim a tax deduction on new equipment (such as a new ute, an oven, or a coffee machine) up to the value of $20,000.
Payments up to $10,000 over the course of a person’s study will also be on offer for people willing to learn clean energy skills under the revamped ‘New Energy Apprentice Payment’.
MEDICATIONS
The cost of PBS-listed medications will be frozen for everyone with a Medicare card for one year, one of the key cost of living measures committed by the government this budget.
For concession card holders and pensioners, prices will be frozen for five years.
It means the price will remain at $31.60, or $7.70 per medicine for concession card holders and pensioners.
AGED CARE
Half a billion dollars will be spent next financial year to release 24,100 more home care packages.
$610 million will be given to the states to assist long stay older patients to be discharged from hospital sooner. Those initiatives will be developed by states and territories.
Another $190 million will be provided on top of that to extend and redesign the Transition Care Programme to provide short-term care of up to 12 weeks for older people after a hospital stay.
DEFENCE
The federal government will spend an extra $5.7 billion on defence over the next four years, and a projected $50.3 billion more in the decade to come as it continues reshaping Australia’s armed forces.
The government predicts it will spend a total $330 billion on defence in the next decade, growing Australia’s navy, preparing the army for shoreline warfare, enhancing long-range strike capabilities and strengthening the nation’s northern bases.
ELECTRICITY BILLS
Every Australian household will get a tidy $300 rebate on their power bills, and eligible small businesses will receive a $325 rebate — a partial extension of bill relief agreed in negotiations with states and territories last year.
From July, all households will have a $300 credit automatically applied to their electricity bills.
RENTAL ASSISTANCE
The maximum rate of money paid through the Commonwealth Rent Assistance payment will be increased by 10 per cent from September this year, which will benefit about 1 million recipients already receiving the maximum rate.
The current maximum payment for a single person receiving rent assistance is $188.20 a fortnight, and $125.47 for a single person in a share house.
HOUSING
The federal government will direct $1 billion of its National Housing Infrastructure Facility towards crisis and transitional accommodation for women and children fleeing domestic violence and for youth.
The funding helps local government to build social housing and supporting infrastructure that otherwise may not go ahead.
Another $1 billion will also be given to states and territories to pay for roads, sewers, energy and water connections for new homes.
HEALTHCARE
The federal government says it is investing $8.5 billion in new money into health this budget.
The government will fund an additional 29 urgent care clinics, adding to the 58 already opened, which offer walk-in care seven days a week completely covered by Medicare.
The facilities are designed to help people receive aid for simple ailments, including many that would otherwise have required them to go to an emergency department.
For the second year in a row, the government has also increased the Medicare levy low-income thresholds for singles, families, seniors and pensioners to account for inflation.
The threshold has been increased up to $26,000 for individuals while the family threshold has been increased to $43,846. For single seniors and pensioners, the threshold has been increased to $41,089 while the family threshold will increase to $57,198.
The family income thresholds will now increase by $4,027 for each dependent child, up from $3,760.
