Anthony Albanese
Prime Minister Anthony Albanese says the government is working to bring cost-of-living relief. Image by Joel Carrett/AAP PHOTOS
  • economy, business and finance

Albanese links new energy plan to cost-of-living crisis

June 30, 2024

Tax cuts and energy bill reductions are set to come into effect as the government also prepares to advance plans to make Australia a renewable-energy superpower.

Every taxpayer will keep a little more of what they earn from Monday as long-planned stage three tax cuts kick in with other measures designed to alleviate the cost-of-living crisis.

Some economists have warned the tax cuts could add to inflation, which may prompt the Reserve Bank to keep interest rates higher for struggling households or even raise them.

Reserve Bank headquarters
 The Reserve Bank will closely watch the effect the tax cuts have on inflation. Image by Dean Lewins/AAP PHOTOS 

But with annualised inflation hitting a six-month high, consumers are feeling the pinch and likely to welcome more after-tax pay in their pockets.

“July is a great month for working people after years of being hit with cost-of-living pressures made worse by big business price gouging,” ACTU secretary Sally McManus said.

Prime Minister Anthony Albanese said his government was focused on addressing cost-of-living pressures in the short term while also looking to grow the economy.

The government will use the final parliamentary sitting week before the winter break to advance incentives for clean energy projects through the introduction of the Future Made in Australia legislation.

“(It’s) very important about how the economy grows in the future, how we get those clean energy jobs, how that helps to create advanced manufacturing,” Mr Albanese said on Sunday in Melbourne.

Consumers will also enjoy a degree of power-bill relief with households to receive a $300 energy bill rebate, applied as four $75 quarterly deductions.

Energy prices have spiked with many people, particularly welfare recipients, unable to afford their bills.

Energy Minister Chris Bowen rejected suggestions the introduction of the rebate showed government attempts to reduce electricity prices had failed.

“This is practical support now to … complement our rollout of the cheapest form of energy, which is renewables,” he said.

The opposition said the government had to admit defeat in the battle against inflation after it hit four per cent last week, roiling financial markets.

“The Albanese Labor Government has completely failed to address the source of Australia’s cost of living crisis – inflation”, Shadow Treasurer Angus Taylor said on Sunday.

“We’ve had three failed budgets from Labor and Australians can’t afford another one.”

Paid parental leave will be increased from Monday to 22 weeks before rising to 24 weeks in July 2025, and then to 26 weeks from July 2026.

Australia’s lowest-paid workers will receive a 3.75 per cent boost, their pay rising by 87 cents per hour to $24.10, or $915.91 per 38-hour week.

Unions had pushed for more while business groups argued for smaller wage increases, claiming they could not afford rising costs.

The tax cuts close out a series of adjustments designed by the Morrison government in 2018 and there are already calls for more changes to avoid the bracket creep that over time pushes tax bills higher again.

The lowest tax rate, for people earning $45,000 or less, will drop from 19 per cent to 16 per cent.

The 32.5 per cent rate will be lowered to 30 per cent for people earning up to $135,000.

People earning above that figure will be taxed at 37 per cent, and the top tax bracket will kick in at $190,000 instead of $200,000.

The average worker will receive a cut of $1888 a year, or $36 a week.

Other changes coming into effect from Monday include a rise in the superannuation guarantee rate to 11.5 per cent.

Union engineered stone rally
 The looming national ban on engineered stone comes after union pressure. Image by Luke Costin/AAP PHOTOS 

A national ban on engineered stone will begin, with almost 600,000 Australian workers exposed to silica dust.

Modelling from Curtin University projects about 10,000 people will develop lung cancer directly related to silica dust.

And under a reform which passed federal parliament last week, vapes will only be able to be sold at pharmacies.