Summary of the 2023 - 2024 Federal Budget
The federal government has handed down its second budget since winning the election last year, with some of the headline announcements having already been leaked before the official announcement.
Below are some key points in this year’s federal budget:
Health and Social Welfare
JobSeeker, Parenting, Youth Allowance, ABSTUDY and Disability Support Pension payments are to increase by $40 per fortnight from 20 September 2023.
The age threshold for those receiving higher income support payments will be lowered from 60 years of age to 55.
From September 2023, the Commonwealth Rent Assistance program will be raised by up to $31 per fortnight.
Recipients of Single Parenting Payment will continue to receive this payment until their youngest child reaches 14 years of age.
From 1 July 2023, eligible households (pensioners, Commonwealth Seniors Card holders, Family Tax Benefit A & B recipients) and eligible businesses will receive electricity bill relief of $500 and $650 respectively.
Additional funding to Medicare to triple the bulk billing incentive.
From next year, an additional 300,000 TAFE and vocational placements will be free.
Tax
The tax cuts announced by the previous federal government will proceed, and is set to commence from 1 July 2024.
The non-deductible threshold for self-education expenses has been removed, making this whole cost tax deductible.
Businesses with aggregated turnover of less than $50 million a year will receive bonus tax deduction of 20% for purchases relating to digitising their operations or digital operations.
From 1 July 2023 to 30 June 2024, small businesses will receive an additional 20% deduction on spendings relating to electrification or more efficient use of energy, up to $20,000 per business. But, there are exceptions which include electric vehicles, capital works, assets that are not connected to the electricity grid etc.
From 1 July 2026, employers will be required to pay their employees’ superannuation at the time that their wages and salaries are paid.
The instant asset write-off threshold on purchase of assets has been increased temporarily to $20,000 per asset for businesses with aggregated turnover of less than $10 million per annum.
For buildings constructed after 9 May 2023, the annual depreciation rate for capital works will be increased from 2.50% to 4.00%.
From 1 April 2025, plug-in hybrid vehicles will cease to be eligible for exemption from fringe benefits tax.
As expected, the low and middle income tax offset has not been extended beyond 30 June 2022. This will mean that most low to middle income taxpayers will see their tax refunds for 2023 reduce between $675 and $1,500.
Superannuation
Amended the non arm’s length income (NALI) rule for self managed superannuation funds to be twice the level of a general expense.
The additional tax on superannuation balances above $3 million will come into effect from 1 July 2025. No further details have been released.
From 1 July 2023, the minimum superannuation drawdown will resume to normal levels, i.e. the 50% reduction in the minimum drawdown requirement has not been extended.
ATO Audit Activities
The ATO will be provided with an additional funding of around $588 million over the next 4 years to conduct GST audits.
An additional funding of $40 million will be provided to the ATO to detect and recover unpaid superannuation contributions.
The Hunter
Funding for a new High Speed Rail Authority to be established in June 2023 to plan for a high speed train network between Newcastle and Sydney.
Confirmation of funding of $25 million per year for the next 4 years to the Port of Newcastle for setting up of hydrogen focused clean energy incentives.
If you would like to know more about any of the details above, then contact our friendly team at H & M Accountants.