2024-25 Victorian Budget and Federal Budget synopsis

Hello, and welcome to our special edition Budget newsletter.

This May has been a big month for Budgets, with the  2024/25 Victorian Budget released on 7 May and the 2024/25 Federal Budget released on 14 May.

We have examined some of the key themes in both Budgets to understand what they mean for Victorians and our Ballarat community.

This year’s state Victorian Budget is called ‘Helping Families’, as it seeks to address issues related to the cost of living.

The Budget responds to two key challenges: high inflation and workforce shortages.

In his Budget speech, Treasurer Tim Pallas says it’s tackling these issues by taking the following four actions:

1. Investing in workers’ skills to tackle labour shortages

2. Aligning the infrastructure program to better reflect workforce capacity

3. Supporting Victorian families with targeted cost of living help

4. Stabilising, then reducing, net debt to Gross State Product (GSP).

The Budget reiterates the Government’s commitment to regional and rural Victoria, announcing $2 billion in infrastructure, services and projects. Its areas of focus include access to healthcare and hospital upgrades, investment in regional schools and TAFEs, cost of living support, and rebuilding, repairing and upgrading roads and rail across the state.

 The Budget provides funding for a number of initiatives in our community:

• The Ballarat Base Hospital will receive $5.4 million to construct a mental health, alcohol, and other drug emergency department hub

• As part of the road upgrades, the Budget includes $61.9 million to create a safer crossing for pedestrians at Miners Rest

• Ballarat will receive a share of the $500 million dedicated sports package for projects at Eureka Stadium and Ballarat Sports and Events Centre

• Western Victoria will share in $1.7 million to improve educational outcomes for students, with money being directed to training psychologists to work in schools.

In the Treasurer’s message, Tim Pallas positioned this Budget as “sensible and disciplined and… responds realistically to the challenges being faced here in Victoria, across Australia and around the world.”

Now, let’s turn to the Federal Budget…

Titled, ‘Cost of Living Help and a Future Made in Australia’, the Federal Budget aligns with the Victoria Budget, in relieving the cost of living pressures caused by the challenges of high inflation and higher interest rates.

In a bid to provide cost of living relief to Australians, the Australian Government has announced $7.8 billion worth of initiatives. This includes:

• Tax cuts for all taxpayers, the average tax cut in 2024-25 will be $1,888

• Power bill relief, which will provide energy rebates of $300 for households and $325 for small businesses

• $1.9 billion over five years to increase rental assistance

• $3 billion in funding to deliver cheaper medicines and improve patient health outcomes in the pharmacy sector as a result, the maximum PBS patient co-payment for pensioner and concession card holders will be $7.70, until 2030

• A $3 billion cut in student debt to provide relief for those with a Higher Education Loan Program (HELP) and other student loan debt

• A commitment to examining pricing and competition in supermarkets, while it won’t provide any immediate relief, it is a step to ensuring Australian’s pay a fair price for groceries

• A commitment to fund the Fair Work Commission’s decision to increase award wages for aged care workers and provide funding toward a wage increase for the early childhood education and care workforce.

The Budget’s Small Business Statement has allocated $641.4 million in targeted support for small businesses to:

• Improve cash flow by extending the $20,000 instant asset write-off for 12 months

• Fund $25.3 million to improve payment times to small businesses

• $23.3 million to increase e-invoicing adoption

• Ease cost pressures with energy bill relief, abolish 457 nuisance tariffs and provide support to small businesses administering the Paid Parental Leave scheme.

Economic forecast

From an economic perspective the Federal Government has forecast a $9.3 billion surplus for FY 2024-25, which Treasurer Jim Chalmers described as a “responsible Budget that helps people under pressure”.

It is the first time since FY 2007-08 that there have been consecutive budget surpluses, although the outlook beyond 2025 tells a different story, with deficits projected for the next decade. The Budget forecasts gross debt to peak at $1.1 trillion, or 35 per cent of GDP, by FY 2027-28.

Loans

We offer a range of mortgage loan products with competitive interest rates, head to our website to see our latest loan offers.  

And remember, we’re not a bank, we are your financial partner. This means unlike at a bank, you will talk directly to our decision-makers, giving you a tailored financial solution and a faster turn-around.