Federal Budget 2024

Australian Federal Budget 2024-25 – Insights from Bentleys
By Tony Sacre, CEO, Bentleys Network

In this, his third federal budget, Treasurer Jim Chalmers has been tasked with managing the significant spending initiatives outlined in the Labor Government’s ‘Future Made in Australia’ plan, while also trying to let RBA Governor Michelle Bullock sleep easy by keeping a lid on inflation.

This is quite the tightrope walk.

Treasurer Chalmers has announced a surplus of $9.3 billion for the financial year, noting that this will dip into successive deficits in future years (which will be substantially more than forecast only six months ago).

Five growing demands were called out in this budget:

• a need to increase spending in defence
• the blowout of the NDIS scheme
• interest payments on debt
• the rising costs of aged care and healthcare
• several Liberal Government initiatives that were not provisioned in the budget

In this budget, it seems the Labor Party has made a significant shift to the left – with a focus on bigger government expenditure.  Energy transition, supply chain resilience, and national security and sovereignty are recurring themes.  There is concern in financial markets that this budget could add heat to what already seems to be a cooked economy.  Labor’s ‘interventionist’ type approach has drawn some negative attention from economists – who are rightly concerned that ‘crowding out’ and ‘pet projects’ will result in wasted economic allocations.

With a federal election in the next twelve months, Labor have put forward the ‘Future Made in Australia’ plan as its foundation, along with a proliferation of subsidies and other support to go towards areas like solar panel manufacturing, investment into quantum computing, renewables, and enhanced defence and infrastructure spending. Students will also be assisted by having their HECS debts reduced (though, many argue zero-interest loans would be a smarter way to go). There will also be caps on international student numbers – which will inevitably win some votes around the country.

Overall, this budget has been designed to address major inflation pressures while enabling large-scale expenditure. It won’t be an easy balancing act for the Labor Government. They don’t have a significant amount of time on their hands, and they won’t want to be seen to be driving up inflation. Unfortunately, I feel that this budget will add pressure to our current relatively strong economy and that the investment initiatives could overstimulate the market.

Our team of specialists at Bentleys have collaborated to share their insights into what the budget means for you, your family, and your business. Their collective wisdom offers expert perspective that is well respected by our clients. We hope you find this analysis valuable.

If you have any questions about how this budget impacts you and your business, please contact your local Bentleys advisor.

We are here to assist you in navigating through the information and to help you get where you want to be.