Lexi Webster
The Australian government's budget for 2024-25 outlines its spending priorities and initiatives. The government intends to address cost-of-living increases while managing inflationary pressure. The budget also aims to increase the economy's productivity to sustainably raise real incomes. It includes tax cuts, investments in healthcare, and support for local governments. The government also plans to enhance manufacturing capabilities in renewables and their supply chains, with significant investments in the private sector through the Future Made in Australia (FMiA) package. Infrastructure spending and aged care reforms are also part of the budget, with a focus on creating jobs and improving quality and safety.
| Characteristics | Values |
|---|---|
| Energy relief scheme | Applies to all households |
| Financial Assistance Grant program | $3.27 billion |
| Aged care reforms | $2.2 billion |
| Infrastructure spending | $4.1 billion |
| Tax cuts | N/A |
| Health services | N/A |
| Manufacturing capability in renewables | N/A |
| Clean energy technology | N/A |
| General government final consumption expenditure | $979 million |
| General government gross fixed capital formation | $323 million |
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What You'll Learn
Energy relief for households
The Australian Government has announced a $1.8 billion extension of the Energy Bill Relief Fund in the 2025–26 Budget. Households and eligible small businesses with electricity bills may receive up to $150 in energy bill rebates from 1 July 2025 to the end of 2025. This is in addition to the $3.5 billion in energy bill relief that was provided in the 2024–25 financial year.
In the 2024-25 program, households were eligible for up to $300 of energy bill relief, delivered in quarterly instalments of $75. Most households will receive their bill relief payments directly from their electricity provider, and they do not need to apply separately for this payment. Households in embedded networks (such as those receiving electricity from a strata manager or landlord in a caravan park, apartment building, or retirement village) may need to apply for the rebate separately.
Small businesses in the 2024-25 program were eligible for up to $325 in energy bill relief, delivered in quarterly instalments of $81.25. Small businesses in embedded networks such as shopping centres may need to apply for the rebate.
Victorian households with an eligible concession card can apply for the $100 Power Saving Bonus through the Victorian Energy Compare website. Concession card holders may also receive an additional $150 over two instalments from 1 July 2025.
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Support for local governments
Local governments in Australia are not mentioned in the Federal Constitution as a separate level of government. They exist due to local government acts created by state governments, which dictate their roles, powers, size, and electoral rules. Local governments are subdivisions of the six federated states as well as the Northern Territory. They are generally run by a council, and their territory of public administration is referred to as the local government area or LGA. There are 537 councils in total across Australia, of which around 55% are regional, rural, or remote.
The Australian Capital Territory (ACT) does not have a separate local government or local government grants commission. Instead, the territorial government of the ACT provides local government services. In 2024-25, the Australian Government provided almost $3.3 billion in untied funding to local governing bodies under the Financial Assistance Grant program. This includes funding brought forward from the 2024-25 estimate and paid to states and territories. Since 1974-75, the Australian Government has provided over $70 billion under the Financial Assistance Grant program. The grant consists of two components: a general-purpose component distributed per capita, and an identified local road component distributed according to fixed historical shares.
Local governments employ just under 190,800 Australians, with women accounting for around 38% of councillors. Councillors can be involved in developing new policies and may sit on the boards of other organisations related to the council's remit. The mayor is generally elected by the council and is empowered to carry out civic and ceremonial functions, including presiding over council meetings. The council's chief executive is usually the head of its paid staff and is responsible for carrying out the council's functions, such as social workers and planning officers.
The Australian Classification of Local Governments (ACLG) categorises local governing authorities based on population, population density, and the proportion of the urban population. While all local governments have approximately equal theoretical powers, those encompassing large cities like Brisbane and the Gold Coast have access to more resources due to their larger population base. Local governments in Queensland and Western Australia maintain some responsibility for fire service functions, and New South Wales county councils are responsible for water supply, flood mitigation, and weed management.
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Aged care reforms
The Australian government has implemented several aged care reforms to improve the quality of care for older people and make the aged care system more equitable, sustainable, and trusted. Here are some key aspects of these reforms:
The Aged Care Act
The new Aged Care Act, which came into effect on 1 July 2025, is the primary law governing the aged care system. This Act aims to improve the lives of older people accessing aged care services in various settings, including their homes, communities, and residential aged care homes. It encourages aged care providers to deliver high-quality care and ensures that people receiving government-funded aged care services are treated with respect and have an improved quality of life.
Support at Home Program
From 1 July 2025, the Support at Home program replaced the existing Home Care Packages Program and Short-Term Restorative Care (STRC) Programme. The aim of this reform is to enable older individuals to live independently in their homes for longer. By 2035, around 1.4 million Australians are expected to benefit from this program. Transitional arrangements were put in place to ensure that those already receiving care would not be financially disadvantaged during the transition.
Wage Increases for Aged Care Workers
The Australian government introduced funding award wage increases for aged care workers, recognising their essential role in providing care for older Australians.
National Aged Care Mandatory Quality Indicator Program
The government expanded this program to include enrolled nurses, allied health, and lifestyle staffing measures in residential aged care. They also worked to expand quality indicators to in-home aged care, emphasising the importance of consistent standards across all aged care settings.
Elder Care Support Program
In partnership with the National Aboriginal Community Controlled Health Organisation (NACCHO), the Australian government introduced the Elder Care Support Program. This initiative provides face-to-face support to First Nations elders across Australia, with 250 trusted facilitators assisting them in navigating and accessing aged care services.
The Australian government continues to prioritise aged care reforms, with regular updates and webinars to inform stakeholders and the community about upcoming changes. These reforms reflect a commitment to enhancing the quality and accessibility of aged care services for older Australians.
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Tax cuts
The Australian government has implemented tax cuts to provide cost-of-living relief for its citizens. These tax cuts are expected to be rolled out over two years, with taxpayers potentially receiving up to $268 in tax cuts for 2026-27 and up to $536 every year from 2027-28 onwards. The government's decision to provide tax cuts is surprising, considering the economic context, as these initiatives are being financed through debt.
The tax cuts are aimed at providing modest cost-of-living relief for individuals, with the government also committing to reducing student loan debt by applying a one-off 20% reduction. The Australian government has also legislated cost-of-living tax cuts for all 13.6 million taxpayers, with the legislation receiving Royal Assent on March 5, 2024.
The government's focus on tax cuts can be understood in the context of appealing to voters before an election while also demonstrating fiscal responsibility. While the tax cuts may provide short-term relief, there are concerns about the lack of focus on productivity and business investment, as well as the long-term sustainability of the country's finances.
It is important to note that income tax is the primary source of revenue for the federal government, contributing significantly to the overall budget. The government spends this revenue on various sectors, including defence, public order and safety, health services, and public services and infrastructure.
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Manufacturing and supply chain
The Australian government has been making efforts to support the manufacturing and supply chain sectors. In the 2022/23 Federal Budget, the government allocated $37.3 million over three years to support the development of defence and fuel manufacturing industries. This includes $32.2 million for the construction of the North Queensland Simulation Park in Townsville, Queensland, and $5.1 million for the development of sovereign capacity in renewable fuel manufacturing for the Australian Defence Force.
The government has also retained funding of $187.1 million over four years for the Simplified Trade System, which aims to simplify cross-border trade for Australian businesses. Additionally, the government provided $134.1 million over four years to bolster biosecurity capability in Australia and support neighbouring countries in addressing the risk of exotic animal diseases.
To enhance supply chain resilience, the Australian government has established the Office of Supply Chain Resilience (OSCR). This office promotes collaboration across agencies, ensuring unified supply chain strategies and reducing reliance on global markets. The government is also investing in regional warehouses, communication networks, and digital platforms to support decentralised logistics, such as investments in 5G infrastructure for IoT tracking.
The government has also terminated some industry grants programs, resulting in savings of $500 million. This includes reduced funding for the Supply Chain Resilience Initiative in 2022/23 and the Modern Manufacturing Initiative.
At the state level, the South Australian Government has established the South Australian Manufacturing Portal, which is a database of suppliers across Australia, connecting them with work in infrastructure, energy, defence, and other major projects. The state is also investing in a green hydrogen sector and pursuing low-carbon energy-intensive manufacturing in sectors such as iron, copper, cement, critical minerals, and fuels.
To address the challenges of scale, cost, and distance to market, South Australia is adopting new technologies, such as Microsoft Azure's Machine Learning and Dynamics 365, to improve efficiency and productivity in the manufacturing sector.
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Frequently asked questions
The Australian government's 2024 Federal Budget includes a range of measures aimed at addressing cost-of-living increases and boosting manufacturing and supply chains. The government will also provide funding for key aged care reforms and implement recommendations from the Royal Commission into Aged Care Quality and Safety.
The Australian government is providing support to all households through an energy relief scheme.
The Australian government is investing in manufacturing and supply chains, with a focus on renewables and net-zero transformation. The government is also providing tax cuts to all taxpayers to boost the economy.
