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From Edwards HR’s Perspective
With the release of the Labor Government’s 2024-25 Federal Budget, the spotlight turns to its key announcements and the ripple effects they will have across various sectors of the economy. In particular, employers find themselves at the forefront amidst a landscape marked by high inflation, low unemployment, and escalating interest rates.
To ensure you’re up to speed, we’ve compiled the key announcements from Budget that may or may not have direct impact to your business. These insights highlight significant changes and financial allocations set to shape the economic landscape.
Please note: these announcements will need to be passed as law through the Federal Parliament.
EASING THE COST-OF-LIVING
The budget unveiled Tax Cuts for all Australian taxpayers, averaging $1,888 annually or $36 weekly, effective 1 July 2024. These cuts aim to alleviate cost-of-living pressures, combat bracket creep, support women, and enhance labour supply, expecting to increase labour supply by 930,000 hours per week.
In addition to these tax cuts, the Budget will deliver $7.8 billion in cost-of-living relief. This includes a range of payments for low- and middle-income families including;
New Energy Bill Relief Fund: $300 in energy bill relief to all Australian households; plus, $325 relief for small businesses, estimated to directly reduce headline inflation.
A Fair Go for Consumers: Government will strive for better deals for consumers at supermarket checkouts.
Cheaper Medicines: Finalisation of the Eighth Community Pharmacy Agreement, supported by up to $3 billion in additional funding to deliver cheaper medicines, improve health outcomes and secure a strong community pharmacy sector.
Support for Renters: Increased government rent assistance by a further 10 per cent, benefitting nearly 1 million households.
Growing Wages: Continued support and funding to the Fair Work Commission decision on increase award wages for aged care workers, building on the $11.3 billion already allocated for the interim 15 per cent increase. Government has also committed to provide funding towards a wage increase for the early childhood education and care workforce, with details to be finalised following the Fair Work Commission processes currently underway. Edwards HR will provide updates as they are finalised.
Supporting Students:
- Debt Relief – The Government will cap indexation on student loans to effectively reduce debts by $3 billion for 3 million Australians to prevent them from outpacing wage growth.
- Prac Payment – More than 73,000 eligible nursing, midwifery, teaching and social work students per year will receive a Commonwealth Prac Payment of $319.50 per week for the duration of their placement.
How Are Employers Impacted?
Edwards HR: With the government addressing the cost of living, which is a concern for many employees, there’s a potential alleviation of pressure on employers to boost salaries to match living expenses; however, the inflation and annual wage increase this year might still strain employers.
However, employers in the early childhood education and care industry and aged care industry should closely follow updates for their sectors in relation to expected industry-specific wage increases.
PARENTAL LEAVE
From July 2025 superannuation will be paid on top of the commonwealth-funded paid parental leave (via Services Australia). This will assist closing the financial gender gap in men’s and women’s savings at retirement.
How Are Employers Impacted?
Edwards HR: This does not financially impact employers but will hopefully guide businesses in the right direction for supporting the closing of gender gaps.
SUPPORT FOR MENTAL HEALTH AND FINANCIAL WELLBEING
This investment will span eight years, and includes the introduction of a free, low-intensity digital service for people with mild mental health concerns. Through this service, every Australian will be able to access timely mental health support without a GP referral. Approximately 150,000 people are expected to make use of this service each year. the Budget allocating $888.1 million for necessary care.
How Are Employers Impacted?
Edwards HR: By acknowledging and addressing the widespread mental health issues faced by Australians, employers could see positive outcomes in their workplace, such as reduced absenteeism, increased job satisfaction, improved employee wellbeing and enhanced overall performance. This may also be a particularly useful resource for employers without an employee assistance program (EAP).
SMALL BUSINESSES
A further $10.8 million to support the mental health and financial wellbeing of small business owners will be delivered by extending the NewAccess for Small Business Owners program and the Small Business Debt Helpline.
How Are Employers Impacted?
Edwards HR: Access to the mental health program could offer small business owners’ various benefits beyond enhancing employees’ productivity and engagement. It can aid in retaining talent by demonstrating a commitment to employee well-being, fostering a supportive workplace culture, and ensuring legal compliance. Additionally, prioritising mental health can strengthen the company’s reputation, attract top talent, and lead to cost savings by reducing absenteeism and workplace accidents. Overall, integrating mental health initiatives can contribute to the long-term success and sustainability of small businesses.
MORE KEY ANNOUNCEMENTS
More Support for Infrastructure Projects – creating more jobs
- An additional $16.5 billion for new and existing infrastructure projects across Australia over 10 years
- More money for every state: an additional $9.5 billion for projects over the forward estimates
- $2.2 billion to enhance connectivity and increase accessibility and reliability of South East Queensland transport networks
Increase on the Defence funding: $268 million to support the development of defence industries and skills, this shift in budget spending always generates new projects within the defence industry which translates to more jobs and increase of the GDP.
Asset Write-Off: The $20,000 instant asset write-off for all small businesses with annual turnover below $10 million will be extended for another year, covering around 4 million small businesses and worth around $290m. Continue to improve cash flow and reduce compliance costs for small businesses by extending the $20,000 instant asset write-off by a further 12 months until 30 June 2025.
Cyber Security Support: $187 million in new funding over four years to tackle tax and superannuation fraud, including tools to block suspicious activity in real time and a taskforce to recover lost revenue and step in when scammers try to claim fake refunds.
Payment Times Reporting: Improve payment times to small businesses and support the delivery of expanded functions for payment times reporting regulator. Under the scheme, large businesses and government enterprises must report their payment terms and times for small business.
- eInvoicing: support increased eInvoicing adoption to improve cash flow, disrupt payment redirection scams and boost productivity for small businesses. The ATO will also receive $23.3 million to continue operating the nation’s e-invoicing network, which acts as an important circuit breaker for email-based scams.
Don’t forget that alongside the new budget, there are increases to superannuation, Modern Award wages and National Minimum Wage from July 2024. Read our latest Employer Update below.
Award wages and super are increasing from 1 July – here’s how employers should be preparing now!
How Are Employers Impacted?
Edwards HR: Employers can anticipate a positive ripple effect from increased infrastructure investment, as it translates to job creation and heightened business activity. Edwards HR advises staying alert for new government projects to capitalize on emerging opportunities. Simultaneously, initiatives like Asset Write Off and Payment Times Reporting offer small businesses vital support, aiding in cash flow management and fostering growth.
We understand the importance of the Federal Budget 2024-25 for Australian employers. Changes in taxation, incentives, and regulations can impact your operations and workforce strategies. Our expertise can help you navigate these challenges effectively.
We're here to support you
Contact us to discover how we can support you in this ever-changing business landscape. You can reach us by calling 07 3568 0866 or emailing admin@edwardshr.com.au
WHERE TO FIND OUT MORE
This article was to highlight the key announcements that could potentially have an impact on employers. Want to know more about the budget and how it might affect you?
For more information and to view the budget 2024-25 visit budget.gov.au.
Stay up to date with all the upcoming changes via our LinkedIn Newsletter below.
For more guidance about this update, or to find out how Edwards HR can support your business, contact our team today on 07 3568 0866.
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