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‘Substantial’: What we know so far about the federal budget

Explainer: The Federal Budget (for beginners)

Source: The New Daily

Treasurer Jim Chalmers will unveil the budget on Tuesday and there’s plenty we already know.

The government hopes to deliver targeted cost-of-living relief without stoking inflation pressures.

“There will be additional cost-of-living relief in addition to a tax cut for every taxpayer. Those tax cuts are the foundation stone of the cost-of-living help in the budget, but there’ll be some more help for people as well,” the Treasurer told Sky News on Sunday.

“The cost-of-living relief in this budget won’t be identical to what we’ve seen in the past, but it will be substantial.”

The budget will also fund wider reforms in areas like education, health, infrastructure and manufacturing.

Here’s a rundown of what we know about Tuesday’s budget and what’s in it for Australian families.

Big picture

Treasury is tipped to unveil a $28 billion upgrade to the budget on the back of much higher tax payments from Australian workers.

But with medium-term spending pressures building and inflation still too high, Chalmers is foreshadowing spending restraint. He denied it would be “a smash-and-grab budget, because people are hurting and the economy is slowing”.

“We do expect the budget to put downward pressure on inflation rather than upward pressure, in every budget we update all the forecasts,” he told ABC TV on Sunday.

“These are uncertain times to make forecasts about the economy but people should expected to see one of the consequences of our budget is low inflation rather than higher.”

Tax cuts

The biggest cost-of-living package that will be trumpeted in the budget are changes to the Coalition’s stage-three tax cuts, which will start in July and cost $359 billion over 10 years.

Labor changes to the tax plan means average income earners will receive more than was originally planned, with the government saying 84 per cent of workers will be better off.

The average tax cut is expected to be about $1888 in 2024-25, according to official forecasts.

Student debt

About $3 billion in HECS-HELP loan debt will be wiped out under a plan to deliver relief to students and graduates set to be unveiled in the budget.

The plan will see indexation of payments changed from the Consumer Price Index (CPI) to the lower of inflation and the Wage Price Index (WPI) – backdated to June 2023.

That will wipe out large amounts of the recent increase in outstanding loans over the past year.

Made in Australia

The budget will also allocate more than $7 billion in funding to projects under the government’s Made in Australia Act – a suite of industrial subsidies aimed at boosting local manufacturing.

It includes $1 billion in funding for local solar panel manufacturing, $2 billion to encourage more green hydrogen projects and $1 billion to support building a quantum computer in Australia.

Tradies

The budget will put away $90 million to support an increase in the number of skilled workers needed in the construction sector, particularly amid plans to expand housing supply drastically.

It will create fee-free TAFE courses and apprenticeship programs, the government has said.

Infrastructure

The budget will also contain more than $17 billion in infrastructure projects, including an $147.5 million investment in planning for new roads and rail across greater Western Sydney.

Projects such as the Mamre Road Stage 2 upgrade and Elizabeth Drive sections upgrade in New South Wales will receive funding.

An additional $20 million will be given to the NSW government to develop a business case for extending Sydney’s rail lines into the Macarthur region.

Domestic and sexual violence

The government is spending $925 million on domestic and sexual violence policies, including a crackdown on deepfake porn and new programs to help women leave violent relationships.

It will include a payment of $5000 to help women leave violent relationships and new laws to prevent doxxing.

Consultants slashed

The government plans to save $1 billion in 2024-25 by slashing the public budget for consultants following a series of scandals at big firms that has driven a rethink about the industry in cabinet.

The government says 8700 jobs that were once contracted out to consultancies across the federal government have now been brought in house since Labor took office back in May 2022.

Energy bills

There may also be more relief against high energy bills on the way for households, with Prime Minister Anthony Albanese indicating last month that a $1.5 billion package of rebates first unveiled in 2022 could be extended.

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