Energy rebates for every household, a cap on the price of prescriptions and further relief for renters have led cost-of-living relief measures in the federal budget.
Treasurer Jim Chalmers' third budget also contains tax cuts of $36 a week on average for all taxpayers, while eligibility for JobSeeker payments will be extended.
In announcing a second-straight budget surplus of $9.3 billion, the treasurer warned that while "fraught and fragile" economic conditions were ahead, Australia was prepared to meet the challenges head on.
"In our future, we must strive for more than muddling through or making do," Dr Chalmers told federal parliament on Tuesday night.
"This budget shows we are realistic about the pressures people face now, and optimistic about the future."
Power bill relief will see every household get a $300 energy rebate from July, while eligible small businesses will get a $325 rebate.
As well, Commonwealth Rent Assistance will increase by 10 per cent for more than one million households, with the government spending $1.9 billion over the next five years.
On average, those on rent assistance will receive an extra $19 per fortnight.
The rent assistance rise is the first time there have been consecutive increases in the payment in 30 years.
It's expected the combined measures of energy relief and rent assistance will shave half a percentage point off inflation, with consumer price growth set to fall into the Reserve Bank's target band of two to three per cent by the end of calendar 2024.
The cost of medicines will also be frozen, with a cap of $31.60 set for prescriptions included in the Pharmaceutical Benefits Scheme.
Cost caps of $7.70 will also be in place for five years for pensioners and concession holders.
Further cost-of-living measures include the well-foreshadowed stage three tax cuts, with all taxpayers to keep more of their pay from July.
On average, taxpayers will save $1888 in the upcoming financial year, or $36 a week.
Meanwhile, the Labor government will extend eligibility for the higher rate of JobSeeker payments to those with a partial capacity to work up to 14 hours per week.
Almost one million people on income support will have social security deeming rates frozen for the next financial year.
Dr Chalmers said the cost of living measures would be split between broad-based relief and targeted programs.
But shadow treasurer Angus Taylor said the budget had failed to address cost-of-living pressures.
"Australians will be disappointed by tonight's budget, it does nothing to help Australians get ahead and to restore their standard of living," he said.
"The government has shown it is focused on the wrong priorities at a time when Australians are doing it tough."
The Business Council of Australia said the budget takes positive steps to boost competitiveness, while the Australian Chamber of Commerce and Industry said the spending plans raised questions on taming inflation in the long-term.
The budget includes $6.2 billion in new housing measures, with $1.9 billion to go towards building 40,000 new social and affordable homes.
The government has also flagged it would work with universities to increase the supply of student housing to meet demand.
University students on placements as part of their degrees in teaching, nursing, midwifery and social work will get an extra $319.50 a week from July 2025, while $3 billion has been wiped from student debt under further tertiary education changes.
Indexation of HECS debt has changed to be based on inflation levels or the wage-price index, whichever is lower.
The government also wants to boost the country's manufacturing capabilities under a $22.7 billion Future Made in Australia fund.
The fund will help to boost investment from the private sector to key areas in Australian industry.
More than $800 million will also be spent on mental health support packages, headlined by a free digital support program for 155,000 people per year.
Australians will be able to access services for mental health help without a referral, under the package which will be up and running by January 2026.
FEDERAL BUDGET SUMMARY
ECONOMY
* Budget surplus of $9.3 billion in 2023/24
* Deficits of $28.3 billion in 2024/25, $42.8 billion in 2025/26, $26.7 billion in 2026/27 and $24.3 billion in 2027/28
* Commonwealth net debt rising to $552.5 billion (20 per cent of gross domestic product) in 2024/25, before hitting $697.5 billion (21.9 per cent) in 2027/28
* Economic growth to rise to two per cent in 2024/25 before expanding to 2.5 per cent in 2026/27
* Unemployment rate of 4.5 per cent in 2024/25, holding at that level through 2026/27 then easing to 4.25 per cent in 2027/28
* Inflation rate, as measured by consumer price index, of 2.75 per cent in 2024/25
* Wages to rise by 3.25 per cent in 2024/25
COST OF LIVING
* Tax cuts for all Australians, averaging $36 a week
* Energy bill relief of $300 for every household and $325 for around one million small businesses
* $1.9 billion for further rent relief assistance for nearly one million households, the first back-to-back increase in Commonwealth Rent Assistance in more than three decades
* Cheaper medicines for all, with $7.70 cap for five years for pensioners and concession card holders
* $1.1 billion to pay superannuation on Government-funded Paid Parental Leave
* $138 million to boost funding for emergency and food relief and financial support services
WOMEN
* $925 million for assistance and support for women fleeing violence at home and for housing
* $56.1 million to support women's sexual and reproductive health initiatives over four years
* The government will conduct a regular survey to hear directly from women about their concerns and priorities for gender equality
* $55.6 million to support women's careers in clean energy
MANUFACTURING
* A 'front door' for priority projects with streamlined and strengthened approvals
* $6.7 billion production tax incentive for the production of renewable hydrogen
* $1.7 billion to promote net zero innovation, including for green metals and low-carbon fuels
* $1.5 billion to strengthen battery and solar panel supply chains through production incentives
* $7 billion production tax incentive for the processing and refining of critical minerals
* $566.1 million to map Australia's geological potential to support net zero transition
* $14 million to build better markets through trade, promoting competitive and fair global markets
HEALTH
* $2.8 billion to strengthen Medicare and the health system
* $3.4 billion for new and updated medicine listings on the Pharmacuetical Benefits Scheme
*$825.7 million to continue to test for and vaccinate against COVID-19
* $888.1 million for mental health care
HOUSING
* New housing investment of $6.2 billion
* An extra $1 billion to states and territories to deliver new housing
* Additional $1.9 billion in concessional finance for social and affordable homes
* An extra $423 million for the National Agreement on Social Housing and Homelessness
* $88.8 million for 20,000 new fee-free TAFE places, including pre-apprenticeship programs, in courses for the construction sector
BUSINESS
* $290 million to extend the $20,000 instant asset write-off for small businesses
* $10.8 million to support the mental and financial wellbeing of small business owners
* $25.3 million to improve payment times to small businesses
* $23.3 million to increase eInvoicing adoption
*$10 million to provide additional support for small business employers administering the Paid Parental Leave scheme
* $20.5 million to the Fair Work Ombudsman
REGIONS
* $519.1 million from the Future Drought Fund for farmers and rural communities
* $68 million to roll out community wi-fi in remote communities and better support digital literacy
* Funds for improving remote airstrips
DEFENCE
* $56 billion allocated for defence in 2024/25
* $101.8 million over seven years from 2024/25 to build the industrial workforce required for Australia's planned nuclear-powered submarines
* $68.4 million over seven years from 2024/25 for initiatives in the new Skills and Training Academy
* $34.7 million over six years from 2024/25 for the Shipbuilding Employment Pathways
* $16.3 million over six years from 2024/25 for 3,000 scholarships for students relevant to the nuclear-powered submarine programme
* $123.8 million to maintain and enhance civil maritime security capabilities
* $165.7 million will also help businesses to scale up and deliver the Sovereign Defence Industrial Priorities
* $268 million to support the development of defence industries and skills
INFRASTRUCTURE
* An additional $16.5 billion for new and existing infrastructure projects across the country over 10 years
* $466.4 million to advance Australia's quantum computing capabilities
* $138.7 million to improve Australia's response and resilience to natural hazards and disasters
* $174.6 million from the National Water Grid Fund to enhance water security, boost agricultural production and help drought-proof regional communities
* $288.1 million to expand Digital ID into a whole-of-economy service
* $448.7 million for advanced satellite data on climate, agriculture, and natural disasters
EDUCATION
* Student debt relief totalling $3 billion for more than three million Australians
* To cap the student loan indexation rate to be the lower of either the consumer price index or the wage price index
WELFARE
* $468.7 million to support people with disabilities
* $227.6 million for a new specialised disability employment program to support approximately 270,000 Australians with disability to prepare for and find work
* $1.8 billion to support additional frontline staff at Services Australia
* $630.3 million to enhance myGov
* $314.1 million to enhance safety and security at Services Australia
* $41.2 million in targeted support for JobSeeker Payment recipients with additional barriers to work
AGED CARE
* $2.2 billion to improve aged care
* $531.4 million to release an additional 24,100 Home Care Packages in 2024/25
* $1.2 billion in critical digital systems to support the introduction of the new Aged Care Act and deliver a contemporary IT system.
* $87.2 million for workforce initiatives to attract nurses and other workers into aged care
INDIGENOUS
* $111.1 million to improve remote First Nations communities' access to essential services in the Northern Territory
* $53.8 million to establish First Nations language centres and expand learning services
* $29.1 million to partner with First Nations community-controlled peak bodies to improve early childhood and education outcomes
* $100 million to establish the Outcomes Fund and supporting place-based strategies in skills and employment
ENVIRONMENT
* $17.6 million for operations of the Antarctic program's main research vessel, RSV Nuyina
* $163.3 million for safety works and year-round scientific programs for the Macquarie Island research station
* $48 million for reforms to reform Australia's carbon credit scheme
* $40.9 million allocated to the Nature Repair Market to attract businesses and philanthropists to invest in projects to protect the environment
DISABILITY
* $214 million over two years to fight fraud and to design NDIS reforms
* $160.7 million to upgrade the NDIS Quality and Safeguards Commission's information technology
* $45.5 million to establish an NDIS Evidence Advisory Committee
* $20 million to start consultation and design on reforms to help NDIS participants and people with disability navigate services
– AAP