Managing people

Federal Budget 2024: What HR leaders need to know

The 2024-25 Federal Budget has introduced crucial financial initiatives, from increased investments in skills development for future-critical sectors to financial relief packages.  

22 May 2024

Treasurer Jim Chalmers unveiled measures in the recent Budget to provide relief to Australian households and businesses impacted by financial pressures. A vital component of this plan is a $3.5 billion energy relief bill, which will give all Australian households $300 in energy rebates. Additionally, stage 3 tax cuts will be reinstated from July 1.

Independent senator Jacqui Lambie criticised the government for not implementing means-testing for the energy rebates. At the same time, Greens Leader Adam Brandt believes the measures fall short of supporting those experiencing significant hardship.

In his Budget address, Chalmers highlighted the challenging global conditions, including global uncertainty, cost-of-living pressures, and rising interest rates, which are expected to slow the economy. Growth is projected at 1.75 percent for the current financial year and 2 percent for the following year. This will likely result in a softening labour market, with unemployment anticipated to increase marginally to 4.5 per cent in the coming year.

According to the Treasurer, despite the challenges, Australia's economy is well-positioned to confront them. He emphasised that the "responsible relief" implemented by the current Budget will contribute to building a more resilient and robust economy.

Beyond the cost-reduction measures, the Budget also includes significant investments in developing a skilled workforce for the future, measures to combat violence against women, a proposed wage increase for aged care and childcare workers, and support for small businesses navigating Australia's new industrial relations landscape.

Here is what HR Leaders need to be aware of: 

Skills, Jobs, and Wages in the Australian Budget

Skills:

  • $600 million has been allocated to improve skills and training, focusing on the construction, clean energy, and manufacturing sectors.
  • This includes $50 million for training in wind, solar, pumped hydro, grid battery storage, electricity networks, hydrogen, and relevant electrical and construction trades.
  • $30 million has been added to increase the number of teachers, assessors, and trainers in the clean energy sector.
  • There is a strong focus on apprenticeships, with $1,500 in reimbursements for small-to-medium-sized businesses hiring clean energy, construction, and manufacturing apprentices.

Jobs:

  • Two new paid work placement programs will support vulnerable and marginalised Australians by connecting them with opportunities in businesses and social enterprises.
  • Over the next five years, $2.4 billion will be invested to create jobs for First Nations people in remote Australian communities.
  • The new Remote Jobs and Economic Development Program aims to create up to 3,000 jobs in remote regions.
  • The Building Women's Careers program will support women entering traditionally male-dominated industries, focusing on construction, clean energy, advanced manufacturing, and digital technology.

Wages:

  • Following a 15% wage increase for the Aged Care sector in the last Budget, the government plans to fund a further increase for this cohort and childcare workers.
  • $87.2 million will be allocated for a workforce initiative to attract more nurses and aged care workers.

Superannuation on paid on parental leave

  • To help narrow Australia's gender pay gap, which currently stands at 12%, the government will allocate $1.1 billion towards superannuation payments on top of government-funded parental leave for parents of newborns or adopted children born after July 1, 2025.
  • This recommendation comes from the Women's Economic Equality Taskforce, headed by Sam Mostyn AO, and is expected to benefit approximately 180,000 families annually.
  • Additionally, employers' mandatory superannuation contributions will increase from 11% to 11.5% in June and reach 12% by July 2025.
  • These changes build upon previous enhancements to Australia's paid parental leave scheme, adding two more weeks of paid leave starting in July, eventually increasing the total scheme from 20 to 26 weeks by July 2026.

Funding towards family and domestic violence prevention

We have seen in recent months nationwide protests demanding increased government action to ensure women's safety. Instead of establishing a royal commission on domestic violence, as numerous Australians advocated, the government announced a comprehensive $925-million package aimed at addressing violence against women and children.

HECS debts cleared

Over three million students in Australia will receive debt relief as the government wipes out $3 billion in student HECS debts. Treasurer Chalmers announced that student loan indexation will be capped at the lower consumer price index or the wage price index beginning in mid-2023. This action is predicted to provide approximately $1200 to the average student.

In a separate initiative, the government has committed $1.6 billion to ensure that students undertaking practical work placements as part of their teaching, nursing, midwifery, or social work studies will now receive $319.50 per week.

Investment into Mental Health

To address the widespread mental health concerns in Australia, the Budget has allocated $888.1 million to provide individuals with access to the necessary mental health care. This investment, spanning eight years, will introduce a free, low-intensity digital service tailored for people experiencing mild mental health issues. Through this service, every Australian will have convenient access to timely mental health support, eliminating the need for a GP referral, with an estimated 150,000 individuals expected to benefit each year.

Furthermore, recognising small business owners' unique challenges in recent years, the Budget has allocated $10.8 million to support their mental and financial well-being. This provision will offer small business owners tailored, accessible, and confidential support, empowering them to navigate the challenges they may encounter.

Small business support with industrial relations reforms

The Australian government has pledged initiatives to support small business owners and ensure compliance with recent industrial relations reforms.

One initiative is a $20 million investment over four years. The Fair Work Ombudsman will receive these funds to expand the Employment Advisory Service, which provides guidance and resources for employees and employers and helps resolve workplace disputes.

Another initiative is to assist small businesses in complying with the Right to Disconnect legislation, which will take effect in August 2025.

In addition to these measures, the government is offering tax relief by extending the instant asset write-off scheme. This scheme allows businesses with less than $10 million annual turnover to claim an immediate tax deduction for eligible business assets up to $20,000.

Cathy Ngo

Content writer, presenter and podcaster

Cathy is an employee relations specialist and writer. With a comprehensive understanding of workplace relations, health and wellbeing, Cathy is committed to empowering organisations and individuals to thrive.

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