2023 Federal Budget Highlights

The Australian Federal Budget 2023-24: What You Need to Know

Here are some of our key takeaways on what this budget means for you, your family and your business.

Federal Budget 2023

In a challenging economic climate that sees many Australians grappling with pressure from rising interest rates and living costs, Australian Treasurer Jim Chalmers handed down the 2023-24 Federal Budget on 9 May 2023.

He announced a number of proposals, aiming to help with cost of living, including energy bill rebates, help with out-of-pocket health costs and more money for jobseekers and renters. It also included initiatives and support programs to help small business owners with cost pressures and contemporary challenges.

Businesses

Increasing the instant asset write-off to $20,000

The Government will improve cash flow for small businesses by temporarily increasing the instant asset write-off threshold to $20,000 for businesses with an aggregated annual turnover of less than $10 million.

Other measures

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.
Deductible gift recipients list to be updated.
To help boost cash flow, PAYG and GST uplift rates will be set at 6% for the 2023-24 financial year instead of 12%
Increased capital works deduction rate and reduced withholding on managed investment trust payments will apply to new build-to-rent projects.
The clean building managed investment trust withholding tax concession will be extended to eligible data centres and warehouses.
To help small business owners build their in-house capability to protect themselves from cyber threats, $23.4m has been committed to the Cyber Wardens Program. This program will run for three years and will be delivered by the Council of Small Business Organisations
$392.4 million has been committed to the Industry Growth Program which aims to help small to medium sized start-ups commercialise their business ideas and grow their operations. The program will provide business grants and mentorship programs.
$101.2 million over five years has been committed to support small businesses integrate artificial intelligence (AI) technology to improve their business processes and increase competitiveness.
Start date of a measure to prevent franked distributions funded by certain capital raisings has been postponed to 15 September 2022.
Introduction of tradeable biodiversity stewardship certificates issued under the Agriculture Biodiversity Stewardship Market scheme will be delayed to 1 July 2024.
The Location Offset rebate and the Qualifying Australian Production Expenditure thresholds will be increased to boost investment in film production in Australia.
The Department of Finance will be implementing measures to improve the ability for small to medium sized enterprises (SMEs) to compete for government procurement opportunities. This will include improvements to AusTender to increase transparency and establish a supplier portal for panels.
The Australian Competition and Consumer Commission will be establishing a complaints mechanism that will allow small business advocacy groups raise systemic issues.

Superannuation

Introducing payday super

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.

Other measures

Superannuation tax concessions will be reduced for individuals with total superannuation balances in excess of $3 million from 1 July 2025.
The non-arm’s length income (NALI) provisions will be amended to provide greater certainty to taxpayers.

Tax Administration

Additional funding for ATO

The government will provide additional funding for the ATO (and other regulators) to lower the tax-related administrative burden for small and medium businesses, cut paperwork and reduce time small business spend doing taxes.

Other measures:

Reduction in GDP adjustment factor for pay-as-you-go and GST instalments.
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 and its scope expanded.

Individuals

Increasing income support payments

The Government will increase working age and student payments by $40 per fortnight. A single person (under age 60) receiving a typical total rate of Jobseeker Payment of $701.90 per fortnight will start to receive $741.90. Jobseeker recipients aged 55 and over (currently 60 years) who have been on payment for 9 continuous months will receive the higher maximum rate of $761.30.

Other measures

No changes to incoming tax rates.
Eligible single parents will now receive the Parenting Payment (single) until their youngest child turns 14, up from 8 years old.
Housing measures will be introduced to increase support for social and affordable housing and improve access for home buyers.
The maximum rate of Rent Assistance will increase by 15%. This means a single person with no dependent children currently receiving the maximum payment of $157.20 per fortnight will start to receive $180.80, as well as their income support payment.
Eligible households will receive a rebate of $500 per year and eligible small businesses $650 per year on their power bills.
Increasing Medicare Levy low-income thresholds: low-income threshold for singles will be increased to $24,276 (up from $23,625). For couples with no children, the family income threshold will be increased to $40,939 (up from $39,402). The additional amount of threshold for each dependent child or student will be increased to $3,760 (up from $3,619).
Eligible lump sum payments in arrears will be exempt from the Medicare levy from 1 July 2024.
The Government will invest $3.5 billion over five years to triple the bulk billing incentive for GP consultations for children under 16 and Commonwealth concession card holders.

Still have questions? Balanced Beans Bookkeepers and Accountants in Newcastle & Maitland have the answers

For more information on how the budget changes might affect you and your business, reach out to us online. Alternatively, contact us on (02) 4046 1000.