The federal budget, to be handed down on Tuesday night, will deliver additional tax relief for all Australian workers, but the benefit will not take effect for another year. 7NEWS has confirmed that the budget will include a tax offset of between $200 and $300 for every worker, but it will only apply to the 2024-25 financial year, meaning workers will see the benefit in their tax returns in 2025.
One-year delay to curb inflation
The one-year delay is designed to reduce the budget's impact on inflation in the short term, a key aim of the government's financial strategy. Treasurer Jim Chalmers has indicated that managing inflation will be a major focus. Finance Minister Katy Gallagher said, "You will see a focus on cost of living. The tax rebates will go to all wage and salary earners for the next financial year."
Economist Chris Richardson described the timing as sensible. "You've got to be careful handing out too much money at the moment," he said. "That would be an inflation risk."
Concerns over broken promises
The budget comes amid concerns about broken promises, particularly regarding taxing investment properties. From July 1 next year, negative gearing will apply only to new builds, but will continue for investment properties owned before that date. Additionally, from July 1 this year, tax concessions on all future capital gains will be slashed, reducing the advantages investors have over first home buyers.
When asked about the trust deficit facing major parties, Gallagher said, "If governments change their mind or change the position that they previously held, the responsibility is on government to explain that."
Opposition housing spokesman Tim Wilson criticised the changes, stating, "They're going and they're shoving their hand down the back of Australians' pockets." However, Housing Minister Clare O'Neil defended the approach, saying, "There is one thing that matters more than any other, and that is building more homes."
Funding for housing and environmental approvals
To help achieve the goal of building more homes, the budget will include half a billion dollars to cut so-called green tape — complex environmental approvals that delay housing and energy projects. Minister Murray Watt said, "What we will see as a result of this announcement is faster 'yeses' and faster 'nos'."
The budget will also allocate $60 million to house an additional 4,300 homeless youths over the next four years.
Budget theme: resilience and reform
The budget's theme has been revealed as "resilience and reform," with Chalmers promising that the cuts he announces will be bigger than any new spending. However, big cuts can often draw significant complaints from voters.
