Federal Budget 2024: Comprehensive Measures Target Housing and Cost-of-Living Challenges

As Australia braces for the unveiling of the 2024 federal budget, a clear focus emerges: addressing the housing crisis and enhancing cost-of-living relief measures. Federal Treasurer Jim Chalmers is poised to present a budget that, while being vigilant against fueling inflation, promises significant aid to the housing market and targeted tax cuts aimed at easing the financial burden on average Australians.

According to Benn Dorrington in his piece, “Federal Budget Predictions: What to expect for the housing market,” the government is set to introduce initiatives to bolster housing supply amid fears that its goal of constructing 1.2 million new homes over the next five years may not be met. Chalmers highlights that “housing will be a focus of the budget” due to a “chronic shortage of homes” in the country. This is echoed by Housing Industry Association managing director Jocelyn Martin, who welcomes the government’s commitment, noting, “One of the key issues in building these much-needed homes are having an adequate workforce and without this the Government will fall well short of its housing target.”

In addition to focusing on the supply side, the budget will also feature measures aimed at directly assisting homebuyers. The controversial Help to Buy scheme, if passed, would see the government contributing up to 40% of a home’s purchase price, thereby easing entry into homeownership for many Australians.

On the tax front, Dorrington reports that the budget will implement revised stage three tax cuts from July 1, benefiting primarily low- and middle-income earners with a more generous tax break, thus providing immediate relief from the rising cost of living. This adjustment is expected to save taxpayers significantly, with an average full-time worker seeing a cut of approximately $2,134 compared to last year.

The budget will also address the soaring student debt issue, with plans to recalibrate the interest calculations on student loans, potentially saving three million Australians an average of $1,200 on their HECS/HELP debt this year. This move comes in response to a substantial 7.1% interest rate hike triggered by last year’s high inflation, which has placed additional financial stress on students.

Furthermore, welfare recipients may see an increase in support payments and rent assistance, with the government hinting at adopting several recommendations from the Economic Inclusion Advisory Committee to alleviate the financial strain on this demographic.

As Australia faces ongoing economic challenges, the 2024 federal budget appears to be a balanced attempt to stimulate the housing market and provide tangible relief to those affected by the escalating cost of living, setting the stage for a potentially more stable economic environment.

References:

https://www.realestate.com.au/news/federal-budget-predictions-what-to-expect-for-the-housing-market/