Budget wrap

On Tuesday night, Treasurer Jim Chalmers released the 2024 federal budget. It came with fewer headlines and surprises than budget night often brings, as the government had shared most of the significant measures publically in the lead-up.

Today, financial advisers Ellie Fordham and Lucy Atkinson sat down to chat about the measures most likely to impact Verse clients, as well as other impending changes. These include:

• Stage 3 tax cuts:  These cuts involve adjustments to income tax brackets and tax rates, which will result in all tax-paying Australians getting a tax break. The average taxpayer will save $1,888 a year. The changes are intended to simplify the tax system and stimulate economic growth by putting more money into the pockets of taxpayers and encouraging spending and investment.
• Changes to HELP debt: The budget introduces alterations to HELP debt repayments, potentially impacting how much graduates repay each year, and adjusting thresholds to reflect changes in income.
• Expanded paid parental leave scheme: Changes include higher payment rates and longer payment periods for new parents. This provides them with improved financial support during crucial early stages, when families are often challenged financially. In addition, commencing on 1 July 2025 the government will start making super guarantee payments as part of the paid parental leave scheme, resulting in an estimated uplift of $4,250 come retirement for a mother earning the median wage.
• Freezing of Centrelink deeming rates: For those receiving social security payments who are income tested, deeming rates for financial investments will remain at current levels until 30 June 2025. The deeming rate for social security payments has been frozen at 0.25 per cent for the lower rate and 2.25 per cent for the higher rate for a further 12 months. This may potentially impact retirement income strategies and investment decisions.
• Increases to super contribution caps effective from 1 July 2024: Superannuation contribution caps are set to rise from July 2024, allowing individuals to contribute more towards their retirement savings, offering potential tax advantages and increased financial security in later years. Increases include a concessional contribution cap of $30,000, a non-concessional contribution cap of $120,000 and a transfer balance cap of $2m.
• Electricity rebate: A $300 rebate to all Australian households and a $325 rebate to eligible small businesses on their 2024–25 energy bills, aimed at alleviating financial pressures and promoting energy efficiency.

Got questions?If you'd like to talk with your financial adviser about the budget, and any potential impact on your strategy or portfolio, get in touch and we'll make time to chat.