This week saw Treasurer Jim Chalmers handed down the 2024-25 Australian Federal Budget with updates to key economic forecasts.

In his speech, the Treasurer said the stage three tax cuts beginning on July 1 would be the “the biggest part of the cost relief measures in this budget”.

Announcements included:

• $50.3 billion over the decade to keep Australians safe, as part of the National Defence Strategy
• $22.7 billion over the next decade to build a Future Made in Australia
• $13.7 billion production tax incentive for green hydrogen and processed critical minerals
• $1.7 billion Future Made in Australia Innovation Fund
• $520 million to deepen net-zero trade
• $350 million for free university courses to help meet a national target of 8 out of 10 workers achieving a qualification by 2050.

The Treasurer said Future Made in Australia “will help make us an indispensable part of the global economy”.  He also said it would attract investment in key industries: renewable energy; defence and economic security; small business opportunities; and tertiary education for a more skilled workforce.

The Treasurer also said university enrollments would be linked to housing  On international students, he warned universities that the government will move to limit enrolments based on criteria including how much housing a university builds. 

The Federal Government also confirmed it would cap the indexation of HECS loans to wages or inflation, whichever is lowest.  This measure will be backdated to the middle of last year when inflation was at its peak and will wipe off $1200 on average per person, for about 3 million Australians.

A fast-track service for new passports was also announced. Beginning on July 2, Australians will have the option to pay $100 to have their passport processed in five business days.

KPMG said in a statement that the key theme permeating through the Budget was that increased government involvement in the economy will result in better outcomes for society. It also highlighted the significant expenditure targeted at the business sector to support the Made in Australia program, and provide energy cost relief and investment.

While PwC identified global tax changes with a focus on royalties and the taxation of intangible assets for large multinationals, as well as a tightening of the foreign resident capital gains tax withholding regime.

Read more about the 2024/25 Budget here.