As we move into April, following closely after the recent Federal Budget, Prime Minister Anthony Albanese has announced a national election for 3 May – launching an election campaign centred on tax cuts and cost-of-living relief.
Meanwhile, fears of inflation in the United States and concerns about unpredictable and escalating tariffs led to sharp falls on Wall Street during March, particularly in the final week.
In Australia, the events in the US, conflicts in Ukraine and the Middle East, and the beginning of the federal election campaign have all had an impact. The S&P/ASX 200 fell by nearly 5% during March.
The Australian dollar, subdued throughout the year, improved slightly during March before finishing lower at around 63 US cents.
Economic growth increased by 0.6% in the December quarter and by 1.3% for the year, with household wealth rising 0.9% in the same period. Inflation rose by 2.4% over the 12 months to February, slightly down from the previous month's 2.5%.
Consumer sentiment rose by 4% in March, according to the Melbourne Institute and Westpac Bank Sentiment Index. The Reserve Bank's decision to cut interest rates in February, along with easing cost-of-living pressures, provided a notable boost.
Federal Election 2025
With the federal election scheduled for 3 May 2025, Labor proposes additional taxes on superannuation balances over $3 million, alongside increased investment in healthcare and education cost relief. The Coalition’s policies include providing homebuyer assistance via superannuation, reducing government expenditure, and tackling inflation.
RBA Interest Rate Decision
In April, the Reserve Bank of Australia (RBA) kept interest rates unchanged at 4.1%, highlighting global uncertainties and a cautious economic outlook. Future interest rate decisions will be guided by inflation and employment data.
Federal Budget Highlights
The Federal Budget introduced permanent tax cuts effective from July 2024, quarterly energy rebates of $150 for households and small businesses, substantial investments in healthcare and education, and expanded housing support measures. It is advisable to review financial plans to take advantage of these new provisions.
Final Thoughts
With the election and budget in focus, it’s a great time to check if your financial plans are on track.