By Ben Spiers, Director.
On Tuesday 9th May 2023, Treasurer Jim Chalmers presented the Federal Budget for 2023-24. With cost-of-living pressures and interest rates being front of mind for all Australians, this was understandably the main focus of the night. Whilst there will always be winners and losers, this Budget attempted to balance providing sufficient assistance in current times as well as continuing to invest for the future.
The key areas of focus around cost of living are as follows;
- Increases to JobSeeker Austudy, Youth Allowance and rent assistance
- Expansion of the eligibility for single parenting payment
- Energy price relief for eligible households
- Increases in family income limits for child care subsidy eligibility
- A 15% increase in modern award wages for many aged care workers
From a tax point of view, from 1 July 2023, small businesses with a turnover under $10m will be able to utilise the instant asset write-off threshold of $20,000 for 12 months. Businesses with a turnover of less than $50m will be able to access a bonus 20% tax deduction for investment of up to $100k in electrification and energy efficient assets like thermal energy storage, batteries and electric heating or cooling.
There are several key tax measures that have been announced but do not come into effect until later years including;
- Stage 3 tax cuts, which are scheduled to commence on 1 July 2024;
- Additional taxation on superannuation earnings where an individual has over $3m in superannuation, which is scheduled to commence 1 July 2025, and;
- Employers will be required to pay their superannuation guarantee at the same time as they pay their wages from 1 July 2026.
A large amount of funding has been provided to the ATO over several years to implement various initiatives to lower the administrative burden on small businesses as well as to continue to expand and develop their many Taskforces and compliance activities.
Longer term, we see significant investment in cleaner energy from the Government, with $392m to establish an Industry Growth Program supplementing the $15b National Reconstruction Fund, $20.9m over five years towards decarbonizing transport and infrastructure and $2b being set aside to drive the development of a clean hydrogen industry. An additional $1b will incentivise households via low cost loans to install double glazing, solar panels and other energy efficient technologies like batteries.
Overall, a relatively balanced budget, which the Government hopes will assist with the control of inflation and cost of living pressures. To read our friends at Wakefield Partners thoughts on inflation, visit their website, and if you would like to discuss anything regarding tax changes, cashflow management or how the Budget will impact you, please contact your Lee Green adviser or Reception on 8333 3666 or by email.
The information provided in this article is general in nature and does not take into account any person or entity's particular financial situation or needs. Please contact us for advice specific to your circumstances.
This information is current at the time of publication and further updates may have occurred since that date.