Energy rebates and rent assistance to ease cost of living


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The Labor government has once again put the issue of cost of living at the heart of its Federal Budget, announcing a number of initiatives that it says will help Australian households who are continuing to deal with elevated living costs.

"The number one priority of this government and this budget is helping Australians with the cost of living. Responsible relief that eases pressure on people and directly reduces inflation," Treasurer Jim Chalmers said in his budget speech.

So what did the government outline in the budget in the way of cost of living relief? Here are some of the major takeaways.

energy rebates and rent assistance in federal budget

Energy bill relief

More than 10 million households will receive $300 rebates on their power bills from July this year, while one million eligible small businesses will receive $325, as part of a funding initiative worth $3.5 billion announced in the budget.

The move follows a similar measure last year which has provided millions of households and businesses with hundreds of dollars' worth of rebates throughout the year as part of a joint federal, state and territory government initiative.

The government estimates that the latest relief will contribute towards reducing headline inflation by half a percentage point over the 2024-25 financial year.

Rent payment support

Recipients of Commonwealth Rent Assistance will see their support increased by 10% as a result of a new, five-year funding commitment of $1.5 billion.

The government says that the measure, which applies to the maximum rate of Commonwealth Rent Assistance, will assist close to a million households.

Together with the 15% increase announced in last years' budget, the government says that some recipients will have seen their repayments increased by more than $70 a fortnight since 2022.

Tax cuts

Announced months ago but outlined in the budget, taxpayers across the income spectrum will start seeing less tax taken out of their pay slips from the new financial year as part of the government's changes to the stage three tax cuts.

The government says that a worker making $50,000 a year will receive a tax cut of $929 in the 2024-25 financial year as a result of the changes, while the average benefit will come out at roughly $1,888 each year or $36 per week.

"From July 1, all 13.6 million taxpayers will get a tax cut. And for 84% of taxpayers, and 90% of women, a bigger tax cut than they would have under the previous government," says Chalmers.

Student loan indexation reform

Australians with student loan debt, like HECS-HELP debt, will see their collective balances reduced by $3 billion as a result of changes to the way loans are indexed.

Instead of basing the rate of indexation on inflation, the government has announced that it will change it to the lower of the Consumer Price Index or the Wage Price Index - a change that will be backdated to capture the 7.1% indexation rate that was applied in June 2023.

While most Australians with student debt won't necessarily feel the benefit of the change in their bank accounts, they will see it in their current and future student loan balances. However, a small number of people who fully paid off their balances last year may receive a tax credit from the tax office this year.

Medicine price freezes

$3 billion in funding has been allocated by the government as part of the latest Community Pharmacy Agreement - which it is still working to finalise - that it says will help deliver cheaper medicines among other benefits.

The government has announced that as part of the agreement, the maximum Pharmaceutical Benefits Scheme (PBS) co-payment for Australians with a Medicare card will be frozen for the next year rather than rising with inflation.

For pensioners and those with a concession card, the freeze will apply for the five years, which the government says will mean that neither group will pay more than $7.70 (plus any manufacturer premiums) on eligible medicine.

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Tom Watson is a senior journalist at Money magazine, and one of the hosts of the Friends With Money podcast. He's previously worked as a journalist covering everything from property and consumer banking to financial technology. Tom has a Bachelor of Communication (Journalism) from the University of Technology, Sydney.
Phillip Ware
May 16, 2024 5.30am

Rent payment support

Hi Folks,

The rent support payment is means tested, with an upper limit , above which rent support will not be paid at all.

If our payment to our retirement village was less, we would qualify for the payment , but because the retirement village we live in charges over that, we get nothing, and have to meet the total cost.

This is one thing they could have fixed, but didn't.