The winners and losers | Federal Budget

Last week, Treasurer Jim Chalmers handed down the Federal Budget for the 2024-25 financial year. In his third budget, Dr Chalmers has yet again been tasked with tackling crucial issues surrounding cost of living and inflation, and unfortunately, solutions to each of these issues rarely go hand in hand, writes Daniel Swane.

At a time when record-high grocery, energy and fuel prices are driving up spending, Dr Chalmers must see a reduction in overall spending across the Australian population to fight inflation. The Federal Budget is an exhaustive document with measures in place for the entirety of the Australian population, with many groups often caught in the economic and political crossfire. As with any battle, there are winners and losers. So, who are the winners? Who are the losers? And what does this year’s budget mean for university students?

First up, let’s look at the winners.

Taxpayers:

If you’ve read the news at any point in the last year, you’d have likely heard about the new stage 3 tax cuts coming into effect on the 1^st of July. This alteration to the tax system will equate to an overall average tax cut for all Australians of about $1,888 per year, or $36 a week. It’s a small win that will have its effectiveness tested by future inflation growth.

Green Businesses:

The ‘Future Made in Australia’ program is a new addition to this budget, which seeks to invest $22.7 billion into revitalising domestic manufacturing. The green energy sector will win this funding, including $1 billion for a solar project in the Hunter, $6.7 billion for hydrogen production through corporate tax incentives, and a further $1 billion for the development of a world-first quantum computer.

Public Servants:

The Australian public service is set to increase by over 6,000 new jobs through increases to Services Australia and internal department growth in an attempt to reduce partnerships with consulting firms. Coupled with previous increases for the public sector, this represents an almost 25% increase in the size of the bureaucracy since the end of the COVID-19 pandemic.

Defence Industry:

The government has allocated over $100 million in funding for job creation in preparation to support the AUKUS submarines, including a $34.7 million apprenticeship program, with $17.2 million set aside for investment in private businesses in the submarine industry.

Property Development:

This budget provides support for developers and tradespeople in the property sector with $4.3 billion worth of additional expenditure over the next year. This includes $1.9 billion in concessions for the development of dwellings classed as “affordable” and a further $840 million for remote developments. Visas for migrants skilled in construction will also be fast-tracked to alleviate worker shortages.

Endometriosis Treatment:

Longer consultations for endometriosis, PCOS and other gynaecological conditions will now be covered under Medicare via new rebates. These rebates are expected to provide 430,000 new services to people with these conditions across the country. This includes an investment of $107 million to fund research and awareness initiatives and establish specialised pelvic pain clinics in every state and territory.

Now, who loses in this budget?

NDIS Recipients:

This budget removes the automatic top-up of National Disability Insurance Scheme allowances for scheme recipients who use all their allotted funds. This comes as part of a wider government initiative to cut over $14 billion in funding to the NDIS which was established in Labor’s previous government over a decade ago. This will likely force people who suffer from mental and physical disabilities to reduce their spending on services such as specialised equipment and care workers.

Welfare Recipients:

Despite calls from the Economic Inclusion Advisory Committee to increase Jobseeker from $762.70 to $1004.67 per fortnight, the Treasurer has remained firm in his commitment to keep Jobseeker at its current balance, citing potential upward pressure on inflation. This move has been slammed by the Antipoverty Centre, with their spokesperson implying that this budget is leaving people in poverty.

High Income Earners:

I know… how tragic. The new tax cuts mentioned earlier were initially meant to look much different, focusing on cutting taxes for higher tax brackets. The change to these plans has resulted in anyone earning over $200,000 paying $4,546 more tax than if the stage 3 tax cuts had gone through in their initial structure.

Universities:

This budget stipulates an overall limit on international student places across the university sector, which would deprive universities of what has become a large source of external funding. This pressure is further compounded with the recent announcement that the government has set a goal for universities to provide 80% of the Australian working population with a degree within the next 25 years which would require a doubling of available places and staff in all degrees.

National Debt and the RBA:

Despite returning two consecutive (albeit inflation-fuelled) surpluses, Dr Chalmers has also outstripped this increase in revenue by adding an additional $24 billion in spending over four years, leading to a rise to the national deficit of 1% of our total GDP (roughly $20 billion).

In addition to this increase in overall debt, a number of crucial spending constraints have been axed. These include a cap on spending growth, tax receipts to GDP, and savings relative to departmental spending. This move marks an ongoing commitment to spending growth which is counterproductive to inflation reduction and is being slammed by many economists, as it will likely place more pressure on the RBA to intervene in the economy through rate rises.

Now for university students.

This budget is generally positive for university students, with HECS debt relief, paid placements, and rental relief all being key features to be rolled out over the next financial year. As many students will have seen, the government has committed to eliminating $3 billion of HECS debt by indexing balances to the lower of the consumer price index or wage price index. This will result in an indexation on last year’s HECS/HELP balances of 3.2% instead of 7.1%, resulting in a reduction of $1,200 on the average HECS balance of $26,000.

Students who are renting will benefit from a $1.9 billion investment into rental relief, resulting in a $19 fortnightly increase for a single person on the existing $188.20 fortnightly rental assistance payment. This marks a 10% increase in payments to combat an 8.6% average increase in rents. Universities are also set to receive $350.3 million in funding over four years to provide extra fee-free places in bridging courses designed to prepare students for entry into undergraduate study. Aspiring medical students will also be pleased to hear that the government will be committing to the establishment of a medical school in Darwin through Charles Darwin University. Finally, Uni clubs are also set to receive a legislated minimum of 40% of Student Services and Amenities Fee revenues, bolstering on-campus activities.

It remains to be seen whether this budget will achieve all it sets out to do as we enter into the final 12 months of this term of government. Will we see a meaningful reduction in inflation? Will we see a reduction in the cost of living? What shampoo does Peter Dutton use? All we here at Yak Media can say is… watch this space.

Figures used in this article have been sourced from: