“Our economy is turning the corner while the global economy is taking a turn for the worse.’
Treasurer Jim Chalmers may have used these words hoping Australians would take comfort in the ‘exceptional’ fiscal improvement that has been made over this government term, but I know many are left wondering how the threat of a global trade war and general unrest in the United States could affect us.
Chalmers comment that Australia is ‘neither uniquely impacted nor immune’ from these pressures is well founded.
In times of pressure, which, admittedly we are becoming accustomed to, we need local certainty. Initiatives that make us more resilient and better able to withstand change are the only way we can even hope for this ‘soft landing’ the Treasurer keeps referring to. I personally think it will be a bumpy ride for some time.
As a Financial Adviser I am of course always hoping for legislation that will improve the financial position of my clients and their families in some way. The Budget was light on in terms of tangible benefits but here are some positives.
Medicare Levy
Low-income thresholds will be increased for singles, families, seniors and pensioners this financial year, making more families exempt from paying the levy.
Taxation
The lowest individual marginal tax rate will be reduced over two financial years from 16% to 14%.
From 2026/27 individuals could see a tax reduction of $268. From 2027/28 this will increase to $536 per year.
Energy Costs
The current energy bill rebates will be extended for another six months until 31 December 2025. Eligible households and around 1 million small businesses will receive $75 per quarter/ $150 from 1 July 2025.
Health Care
From 1 January 2026, the maximum co-payment for medicines under Pharmaceutical Benefits Scheme will be lowered from $31.60 to $25.00 per script. It will remain at $7.70 for concession card holders.
9 out of 10 GP visits will be bulk billed by the end of the decade and the number of Urgent Care clinics will increase to reduce the pressure on our hospitals.
There were several other initiatives announced including pay increases for Aged Care and Child Care workers, childcare subsidy improvements and student debt reduction measures.
Never was a truer word spoken when the Treasurer admitted that ‘the aggregate numbers don’t immediately translate to how people are feeling and faring’.
Loosely translated; ‘We are still doing it tough’.
The national minimum wage may have increased by around $7,500 per year but what is that money worth when you factor in inflation and the rising cost of living?
Although the hard numbers don’t offer us much relief, relatively, we are sitting in a good place.
We need to stay focused on becoming ‘the primary beneficiaries of the churn and change’ as global economic growth is projected to be the lowest it has been since 1990.
My favorite quote is ‘a mind stretched to new experiences can never return to its former dimensions’.
While we experience constant and inevitable change, we learn to find new opportunities as they present themselves.
We are fortunate our future is made in Australia.
Ciara