2023-24 Federal Budget Announcements
The Federal Budget was handed down on the 9 May 2023, outlining a number of changes that impact businesses, tax & superannuation.
Small Business Instant Asset Write-Off Returns
The instant asset write-off will return for the 2023-24 financial year (between 1 July 2023 to 30 June 2024). If you buy an asset to use for business purposes and it costs less than $20,000, you can immediately deduct the business portion of the cost in your tax return. This deduction is available for each asset that costs less than $20,000.
Quarterly Tax Instalments For GST & Income Tax Halved
Eligible small businesses will halve the increase in their quarterly tax instalments for GST and income tax in 2023 24. These instalments will only increase by 6 per cent instead of 12 per cent to ease the financial burden on small businesses during these economic conditions.
Tax Return Amendment Period To Be Extended From 2 Years To 4 Years
Previously, tax returns could only be amended up to 2 years after they were lodged. This is to be increased to 4 years.
Lower Tax Concessions For $3 Million Or More Superannuation Balances
From 1 July 2025, earnings on balances exceeding $3 million will attract an increased concessional tax rate of 30 per cent. Earnings on balances below $3 million will continue to be taxed at the concessional rate of 15 per cent.
Superannuation Moves From Quarterly Payments To Payday
From 1 July 2026, employers will be required to pay their employees’ super at the same time they pay their wages. This will enable employees to track their entitlements to ensure they are paid on time and in full.
Paid Parental Leave Update
From 1 July this year, Parental Leave Pay and Dad and Partner Pay will combine into a single 20 week payment. This is set to be increased to 26 weeks by 2026. The threshold for the income test for the family is $350,000 per annum.
Medicare Levy Low-Income Threshold Increased
The Government will increase the Medicare levy low-income thresholds for singles, families and seniors and pensioners from 1 July 2022. The increase in thresholds provides cost-of-living relief by taking account of recent CPI outcomes so that low-income individuals continue to be exempt from paying the Medicare levy.
What Exactly Is A Budget Surplus?
For the first time in 15 years, the government announced a budget surplus. But what exactly is that?
Governments are similar to families and businesses in that they earn and spend money. A surplus is simply where a government earns more money during the year than it spends. A deficit is where a government spends more than it earns.
Over time you would want to see an equal number of surpluses to deficits, but why do surpluses occur in some years and deficits in others? This is to do with Fiscal Policy. Governments can manipulate the economy by increasing or reducing their spending.
If a government increases their spending this should stimulate the economy, and if they reduce it then it will slow the economy. We are currently in a cycle where the government wants to slow the economy to help reign in inflation, so it is important that they reduce their spending.
This also corresponds with what economists call Monetary Policy where the Reserve Bank has the ability to manipulate the economy with interest rates. To slow the economy, they increase the interest rate and to stimulate it they reduce them.
Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.