As promised, below are the highlights from the 2023/24 Federal Budget, handed down 9 May so you don’t have to go searching through the social commentary.
There is plenty of social responsibility and buzz words, like surplus, in this year’s budget. However, not a lot for small businesses.
Businesses
The instant asset write-off threshold for small businesses applying the simplified depreciation rules will be $20,000 for the 2023-24 income year. Temporary full expensing which previously allowed the write off in full of all assets ends 30 June 2023, so keep this in mind when reviewing your tax planning.
An additional 20% deduction will be available for small and medium business expenditure supporting electrification and energy efficiency.
FBT exemption for eligible plug-in hybrid electric cars will end from 1 April 2025.
The Location Offset is permanently increasing to 30% from 16.5% and the Qualifying Australian Production Expenditure thresholds will be increased from $15m to $20m and $1m to $1.5m per hour for television series to boost investment in film production in Australia.
Funding will be provided to the ATO over 4 years to lower the tax-related administrative burden for small and medium businesses, cut paperwork and reduce time small business spend doing taxes.
Individuals
Income support payment base rates will be increased by $40 per fortnight.
The minimum age for which older people qualify for the higher JobSeeker Payment rate will be reduced from 60 to 55 years.
The workforce participation incentive measures to support pensioners who want to work without impacting their pension payments will be extended for another 6 months to 31 December 2023.
Eligibility for Parenting Payment (Single) will be extended to support single principal carers with a youngest child under 14 years of age.
Housing measures will be introduced to increase support for social and affordable housing and improve access for home buyers.
The maximum rates of the Commonwealth Rent Assistance (CRA) allowances will be increased by 15% to help address rental affordability challenges for CRA recipients.
CPI indexed Medicare levy low-income threshold amounts have been announced for the 2023-24 income year.
Eligible lump sum payments in arrears will be exempt from the Medicare levy from 1 July 2024.
Funding to improve the administration of student loans will be implemented.
Additional funding will be provided to address the growth of businesses’ tax and superannuation liabilities, and a temporary lodgment penalty amnesty program will be provided to small businesses.
The Personal Income Tax Compliance Program will be extended for 2 years from 1 July 2025 and its scope expanded from 1 July 2023.
Superannuation
Superannuation tax concessions will be reduced for individuals with total superannuation balances in excess of $3 million from 1 July 2025. That is, an additional 15% tax on earnings for funds with a balance in excess of $3m.
Employers will be required to pay their employees’ superannuation guarantee entitlements at the same time as they pay their salary and wages from 1 July 2026. We’re looking to software providers to work with these changes to make it as seamless as possible.
If you would like to know more information about any of these measures, please do not hesitate to contact our office.
