Budget 2024-25: Resists Austerity, Reduces Inflation, Targets Wage Gains

Important support to help with cost-of-living challenges, but more needed

Commonwealth Treasurer Jim Chalmers delivered his 2024-25 budget to Parliament. While it booked a surplus for 2023-24 (the second consecutive surplus), it increased total spending for future years, and forecasts continued small deficits. In the wake of the economic slowdown resulting from RBA interest rate hikes, this new spending is needed and appropriate.

Targeted cost of living measures will directly reduce inflation in some areas (like energy and rents), while helping working Australians deal with higher prices in others (including reworked State 3 tax cuts, and support for higher wages for ECEC and aged care workers). Unlike previous years, the budget is projecting real wage gains in coming years that are actually likely to materialise — however, the damage from recent real wage cuts will take several years to repair, and further support for strong wage growth will be required, from both fiscal policy and industrial laws. The budget also spelled out initial steps in the government’s Future Made in Australia strategy to build renewable energy and related manufacturing industries; these steps are welcome but need to be expanded, and accompanied by strong and consistent measures to accelerate the phase-out of fossil fuels.

Our team of researchers at the Centre for Future Work has parsed the budget, focusing on its impacts on work, wages, and labour markets. Please read our full briefing report.

Full report