The Labor Party has delivered its 2023-24 annual budget in its attempt to aid households dealing with the challenging headwinds of interest rates, inflation, and cost of living pressures.
The treasurer Jim Chalmers confirmed a modest surplus of $4.2b. Our first surplus in 15 years was built on increased commodity prices, strong labour markets, a boost in tax revenue collections and higher short term migration.
Though there are elements in the budget papers that suggests “sticky inflation” remains stubborn at around 7%, Chalmers predicts that inflation will eventually fall from 7% to 3.25% in the next 12 months, whilst our economy is predicted to grow by 1.5%.
Please find below a summary of the key measures announced in the 2023-24 Federal Budget:
Small Business
From 1 July 2023 to 30 June 2024, the government will temporarily increase the instant asset write-off threshold from $1,000 to $20,000.
To support efficient energy consumption, small to medium businesses with a turnover of less than $50m will be able to deduct an additional 20% of all depreciable assets up to the value of $100,000 that are energy efficient assets.
FBT exemption to apply on eligible electric cars from 01/04/2025. Currently the electric car discount applies till 2025.
Superannuation
From 1 July 2026, employers will be required to pay their employees’ superannuation guarantee entitlements on the same day as they pay their salary and wages.
From 1 July 2025, the Government will reduce the tax concessions available to individuals with a total superannuation balance exceeding $3m. The tax rate for individuals with a superannuation balance of more than $3m will increase from 15% to 30%.
Compliance Measures
The ATO will invest an additional $27m in Artificial Intelligence (AI) to improve data matching capabilities and be able to identify and act on cases of superannuation underpayments by employers.
Energy Relief
From 1 July 2023, the government will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible businesses.
Healthcare
The government is investing $3.5b over 5 years to strengthen the foundation of Medicare, making much more affordable to see a doctor or health professional.
Housing Affordability
Greater investment in the construction sector with an ambition to boost supply and encourage the construction of one million new homes from 2024.
Property Investment
The government is offering new incentives to encourage the supply of housing by increasing the capital works tax deduction (depreciation) rate currently from 2.5% to 4% per year for newly constructed build to rent developments.
Company tax Changes for multinationals
The government has agreed to an OECD push for a minimum 15% tax rate for multinational companies, like Google and Facebook. The budget says the measures are "designed to ensure large multinationals pay an effective minimum level of tax on the income arising in each jurisdiction where they operate", and will raise $370m over five years, but will cost $111m.
Financial Crime Taskforce
The government will increase its funding for the Serious Financial Crim Taskforce (SFCT) and the Serious Organised Crime Program (SOC) over four years to 30 June 2027, commencing 1 July 2023. A merging of these programs will maxmise the disruption of organised crime groups and seek to protect the integrity of Australian financial information.
Many of the comments in this publication are general in nature and we recommend that you contact our office and seek professional advice to independently verify how the budget measures affect your circumstances.
If you require any further clarity on the above announcements, feel free to contact our office on 03 9863 6997.
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