About

Here’s the highlights from the Government’s budget update

Share
More money, "conservative spending", higher passport fees, and stage three tax cuts are all sketched out in the Government's budget update.
Jim Chalmers and Katy Gallgher budget update

The Government’s budget update has been handed down. It’s called the Mid-Year-Economic-and-Fiscal-Outlook (MYEFO).

This signifies the halfway point between budgets, and allows the Government to provide a check-in on how Australia’s economy is tracking.

Here’s what it said.

More money

The Government’s budget in May forecasted a deficit of around $14 billion, meaning it predicted it would spend $14 billion more than it would earn in the year. However, the MYEFO has revised this down to $1.1 billion.

The Government did not announce any new major spending commitments, which it said was to avoid increasing inflation (rising prices).

The MYEFO also forecasted an extra $64 billion in revenue over the next four years, due to several reasons including high employment.

Wages

Wages are increasing at their fastest rate since 2009.

However, the MYEFO forecast shows wages will only grow by 0.25% when measured against inflation — a metric known as “real wage growth”.

That’s lower than the May budget prediction of a 0.75% real wage growth.

Passports

The Government will increase the cost of passports by 15% starting in July 2024.

It means the cost of a 10-year adult passport will increase from $325 to $373.75. The extra fees are expected to raise an additional $350 million over three years.

Jim Chalmers described the passport cost hike as a “modest change” which will help authorities improve “identity security”.

Tax cuts

The Government’s mid-year budget update showed no indication of changes to planned tax cuts, which come into effect in July 2024.

Under the Government’s stage three tax cuts, everyone earning between $45,000 and $200,000 will pay the same rate of tax.

Australia’s peak welfare advocacy group, ACOSS, has urged the Government to scrap stage three tax cuts, arguing it will drive up spending and worsen inflation.

Opposition reply

Shadow Finance Minister Jane Hume has accused the Government of adding to inflation through failing to “rein in spending”.

“Australian families will continue to pay a high price for Labor’s inaction on inflation. It’s going to be a very tough Christmas for everyone as result,” she said.

Greens

The Greens said the Government has neglected Australians struggling with the cost of living crisis.

Greens Treasury spokesperson Nick McKim said: “Labor has made a political choice to prioritise budget over doing something to help the millions of Australians who are struggling to pay for food or afford their rent.”

Become smarter in three minutes

Get the daily email that makes reading the news actually enjoyable. Stay informed, for free.

Be the smart friend in your group chat

Join thousands of young Aussies and get our 5 min daily newsletter on what matters in your world.

It’s easy. It’s trustworthy. It’s free.