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Australia
Federal Budget 2024 | Key policies at a glance
15 May 2024 | Minutes to read: 4

Federal Budget 2024 | Key policies at a glance

By William Buck

1. Cost of living measures

Securing cheaper medicines

The Government will provide up to an additional $3b for community pharmacy and cheaper medicine under the Eighth Community Pharmacy Agreement. As part of the funding provided, there will be a one-year freeze on the maximum Pharmaceuticals Benefits Scheme (PBS) patient co-payment for everyone with a Medicare card and a five-year freeze applicable to pensioners and other concession cardholders.

Boosting rent assistance

The Government will provide $1.9b over five years to increase Commonwealth Rent Assistance rates by 10%. This is in addition to the 15% increase in September 2023.

 

Relief for Students

HELP debt relief

The Government have announced measures to limit the indexation of the Higher Education Loan Program (HELP) to the lower of the Wage Price Index (WPI) or the Consumer Price Index (CPI). This will apply retrospectively from 1 June 2023 and is expected to reduce the amount of student debt by $3b, benefitting 3 million Australians.

Student study support

To boost retention in courses related to industries facing shortages and to ease financial strain, around 73,000 students of nursing, midwifery, teaching and social work will be eligible to receive a weekly Commonwealth Prac Payment of $319.50 throughout their placements.

New fee-free TAFE places

The Government will allocate $88.8m commencing in 2024-25 for three years to establish 20,000 fee-free TAFE places. This initiative will also expand access to pre-apprenticeship programs for construction sector students.

2. A Future Made in Australia

A Future Made in Australia

A signature policy of the Federal Budget is the Government’s proposed $22.7b investment into the “Future Made in Australia Act”.

The aim of this proposed Act is to maximise the economic and industrial benefits of Australia’s move to net zero and secure its place in a changing global economic and strategic landscape.

This Act proposes to establish a “National Interest Framework” to identify priority industries that can make a significant contribution towards achieving net zero. The following priority industries have already been identified:

  • Renewable hydrogen
  • Critical minerals processing
  • Green metals
  • Low carbon liquid fuels
  • Clean energy manufacturing, including battery and solar panel supply chains

While at first glance these industries appear to focus on large corporates, there could be opportunities for small to medium Australian manufacturing and technology businesses to benefit from these measures under a proposed $1.7b Future Made In Australia Innovation Fund to be established to “support innovation, commercialisation, pilot and demonstration projects and early stage development” in these priority industries. Exactly what this support looks like for Australian small to medium businesses remains to be seen.

The plan also aims to more effectively attract and enable investment in these industries by:

  • Providing a single point of contact for investors and companies
  • Delivering a joined-up approach to investment attraction and facilitation
  • Supporting accelerated and coordinated approval decisions
  • Connecting investors with the Government’s specialist investment vehicles

This may present an opportunity for Australian investors to work collaboratively with the Government in supporting these priority areas.

Finally, at a high level, other measures announced as part of the Future Made in Australia plan include:

  • $7b tax incentive for the production of renewable hydrogen
  • $7b tax incentive for the processing and refining of critical minerals
  • $38.2m investment into Science, Technology, Engineering and Mathematics (STEM) programs to increase diversity in STEM education
  • $1.5b investment into the Australian Renewable Energy Agency (ARENA) to supercharge investment in renewable energy and related technologies
  • $835.6m to establish the Solar Sunshot program to promote the development of solar manufacturing capabilities and improve the industry’s supply chain resilience
  • $523.2m to establish the Battery Breakthrough Initiative to promote the development of battery manufacturing capabilities
  • $20.3m to fund workforce training for battery research, manufacturing, transport and recycling
  • $20.9m to undertake further consultation on incentives to support the production of low carbon liquid fuels

We expect further information to be released over time about how these measures will be implemented.

3. Property and construction sector budget stimulus measures

The Australian building and construction industry will benefit in terms of a range of new Federal Government funding to the States and Territories for housing and infrastructure, as well as initiatives to increase the available skilled workforce for the industry. This responds directly to requests from States and Territories for an earlier boost to infrastructure funding to help them meet National Cabinet’s 1.2 million homes target and achieve their share of the $3b New Homes Bonus incentive payment. The specific initiatives include the following:

Boosting housing supply:

  • $1b will be made available to the states and territories to deliver new housing in well-located areas.
  • The funding expands on assistance to unblock local infrastructure bottlenecks.

Social housing and homelessness:

  • Government to provide the states and territories an additional $423.1m over five years for social housing and homelessness services, bringing the total to $9.3b.
  • For this new agreement, the Commonwealth will double its dedicated funding allocation for homelessness services – funding the states and territories must match.

Student accommodation:

  • Implementation of regulatory requirements for public universities to provide more purpose-built student accommodation.
  • This will help increase the supply of student accommodation for all students and will ease pressure on the private rental market.

Construction workforce:

  • To strengthen the pipeline of skilled workers in the construction and housing sector, the Government will provide $88.8m for 20,000 additional Fee-Free TAFE and VET places in construction-relevant courses.
  • Government to also provide $1.8m for streamlined skills assessments for 1,900 migrants in the housing construction industry.

Social and affordable Housing:

  • The first $500m minimum annual disbursement from the $10b Housing Australia Future Fund (HAFF) starting in 2024–25 will be used to support social, affordable, and acute housing, including for women and children impacted by family violence and older women at risk of homelessness.
  • Additional concessional financing of up to $1.9b for community housing providers and charities will also be provided to support delivery of new social and affordable dwellings under the HAFF and the National Housing Accord.
  • Expansion of the Affordable Housing Bond Aggregator program with a $2.5b increase in liability cap and an additional $3b loan to Housing Australia will provide community housing providers and charities with greater access to capital funding.

Transport infrastructure:

  • The Government will provide a further $16.5b over 10 years from 2024–25 for priority road and rail infrastructure projects as part of the $120b ten-year infrastructure investment pipeline for nationally significant projects.
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