Tomorrow night, the Federal Government will release the 2024/25 Budget.
There’s no more important economic document for the Government than its Budget.
It documents two things: where the government wants to allocate its money (spending), and how it will pay for it (revenue).
The Federal Government generally relies on taxes to fund the Budget. The biggest sources of tax revenue come from individual taxpayers, companies, and the goods and service tax (GST).
Here’s what to know before Budget night.
Key terms to know for the Federal Budget
The difference between the amount the government spends and the taxes it collects will determine if the Budget is in surplus or deficit.
A surplus is when the government has collected more money than it is spending. It’s what happens when the government has leftover money after allocating funds to each of its projects.
A deficit is when the government hasn’t collected enough taxes to fund everything it wants to. This means it needs to borrow money, which puts the government in an interest-accruing debt.
The Government has been hesitant to reveal details, but it’s expected that this year’s Budget will be in surplus.
This would be the second consecutive surplus. Last year, the Government posted a $22 billion surplus – the first of its kind in 15 years.
Surpluses don’t automatically eradicate debt. The Government is still in almost $1 trillion of debt and is paying billions of dollars in interest on this debt every year.
What will be in it?
While there could be some surprises in the Budget, many of the Government’s biggest initiatives have already been announced.
This includes a decision to wipe $3 billion in student debt fees, as part of an overhaul of the national student debt repayment system. A new payment for students on mandatory work placements has also been announced.
The Government’s revised Stage 3 tax cuts – flagged in January – are set to be the largest cost-of-living measure in the Budget. The changes will come into effect on 1 July and will benefit those earning less than $135,000 the most.
Economic forecast
Also included in each Budget is the Government’s economic outlook.
This will show what the Government expects to change in both the global and domestic economy in the next few years.
Projections about changes to international trade, wage growth, and inflation are all expected to be addressed.
TDA’s Federal Budget coverage
Some of the TDA team will be in Canberra on Tuesday to dissect the 2024/25 Budget.
Coverage will begin on Instagram from about 7:30pm, the same time that Treasurer Jim Chalmers will rise to make his Budget speech in the House of Representatives.
