The 2023-24 Federal Budget has been released. We normally answer the question, “What is in it for me?” However, disappointingly, very little this year. Individuals will need to wait another year to confirm that the legislated tax cuts will commence 1 July 2024. Points to note include:

Individuals

  • Low and Middle Income Tax Offset has not been extended and has now Ceased. Therefore, lots of people will have their tax refunds reduced by $675 to $1,500 from 1 July this year.

Business

  • Instant Asset Write Off of capital assets up to the limit of $20,000 from 1 July 2023 to 30 June 2024 for small businesses with a turnover of under $10 Million. This limit used to be $30,000 before it went unlimited and is now back at $20,000 and could return to $1,000 from 1 July 2024 but it is likely to be extended at a higher amount than $1,000.
  • Introduction of an Energy Incentive Deduction to support electrification and more efficient energy use for small and medium sized businesses with a turnover of less than $50 Million. Eligible expenditure up to $100,000 incurred from 1 July 2023 to 30 June 2024 will be eligible for a Tax Deduction for an additional 20% of the expenditure up to a maximum $20,000. Certain exclusions apply including assets that are not connected to the electricity grid and assets that use fossil fuels.
  • Super payments for employees are to be paid on the same day as wages from 1 July 2026. This will increase the administration burden on employers to have employees super in their Super Fund sooner in the aim of generating more return on their super balance.

Superannuation

  • An additional Tax of 15% on a member’s superannuation balance that is greater than $3 Million.
  • The 50% reduction of the Minimum Draw Down of Pension Payments for Account Based Pensions has Not been Extended. The Minimum Draw Down amounts revert to the normal percentage based on the member’s age from 1 July 2023.
  • The Super Guarantee rate to increase to 11% on 1 July as previously legislated.

The Federal Government is estimating a $4.2 billion surplus for this 2023 Financial Year and a $13 billion deficit for the 2024 Financial Year. The Government needed to balance spending that could push up inflation versus fiscal responsibility and cost of living pressures. By balancing the budget with a surplus, the Government has met their fiscal responsibility obligation.

As these are only the main points, please click here for the NTAA Budget Summary and here for the CPA Australia Budget Summary.

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