The 2024–25 Budget aims to address cost-of-living challenges while fostering a resilient economy shaped by Australia. It endeavours to alleviate present-day pressures, invest in economic robustness, and uphold the Government’s tradition of prudent financial management. Global uncertainties, alongside moderating but still high inflation and rising interest rates, are contributing to the cost-of-living burdens and slowing economic growth. Simultaneously, the worldwide transition to net zero emissions and evolving geopolitical dynamics present both opportunities and hurdles for Australia’s economic well-being and security. Despite ongoing pressures on many Australians, Australia stands in a favourable position compared to other economies to navigate these changes and reap their benefits.

This budget strikes a delicate equilibrium between curbing inflationary trends, providing relief from the cost of living, fostering sustainable economic development, and fortifying public finances. Following a surplus in 2022–23, a consecutive surplus is anticipated in 2023–24, marking the first back-to-back surpluses in almost twenty years. The budget forecasts a reduction in gross debt-to-GDP ratio and anticipates inflation returning to the Reserve Bank of Australia’s target range sooner than previously projected.

Responding to current challenges and laying the groundwork for future prosperity, the budget focuses on:

• Alleviating cost-of-living pressures
• Increasing housing availability
• Promoting a Future Made in Australia through investment
• Enhancing Medicare and the care economy
• Expanding opportunities and fostering equality

Global economic growth is forecasted to remain subdued in the coming years due to various factors such as high inflation, restrictive macroeconomic policies, geopolitical tensions, and challenges in the Chinese economy. While managing inflation remains paramount, as inflationary pressures ease and Labor markets soften, global policy priorities will increasingly shift towards mitigating risks to growth.

Inflation, though still elevated, has moderated from its peak in 2022, and annual inflation is expected to be lower than forecasted at the 2023–24 Mid-Year Economic and Fiscal Outlook. The government’s responsible cost-of-living relief measures, including energy bill relief and Commonwealth Rent Assistance, are estimated to directly reduce headline inflation by half a percentage point.