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2024 Federal Budget Takeaways

On Tuesday 14th May 2024 the federal government handed down their third budget.

Most of the initiatives had already been legislated or announced, so this budget was the least noteworthy we’ve seen in many years.

As with most budgets, there were many more changes proposed than received media attention. This is because they are very industry specific (a new critical minerals production tax incentive), they are ‘business as usual’ changes (updating the list of deductible gift recipients) or they are in relation to topics not generally understood by anyone other than accountants and lawyers (deferral of the expansion of the general anti-avoidance rules).

The changes that are most notable, and will generally affect small businesses, business owners, and self-funded retirees are as follows:  

  1. The Stage Three Tax Cuts and the Increase in the Medicare Levy Low-Income Threshold were re-announced. These will see most Australians receive a tax cut from 1 July 2024. Those on an income of $75,000 will see a reduction of $1,554, an income of $100,000 a reduction of $2,179 and those on an income of $135,000 and above, a reduction of $3,729.
  1. Energy Bill Relief via a rebate on 2025 financial year energy bills is to be provided to small business ($325) and individual households of ($300).
  1. Changes to the HECS/HELP indexation will mean debts won’t increase as quicky with a proposal to link the annual increase to the lower of the Consumer Price Index (CPI) and the Wage Price Index (WPI). In the past it has been based on the CPI, which has historically been higher.
  1. A further Increase in the Instant Asset Write Off for small business was announced. This is an extension of a measure announced last budget, which is currently before parliament but still not legislated. There has been some back and forth regarding who should be eligible, and if the limit should be $30,000 or $20,000. However, the government’s proposal on Tuesday evening was a $20,000 limit for businesses with a turnover of less than $10 million.
  1. The ATO has been allowed an extension from 14 days to 30 days to hold BAS refunds to allow them to check for fraud. This is just one of many measures announced that will Extend the ATO’s Compliance Programs including Personal Income Tax Compliance, Shadow Economy Compliance, and the Tax Avoidance Taskforce.
  1. Amendments have been proposed to the Foreign Resident Capital Gains Tax (CGT) regime to broaden the assets foreign residents pay CGT on and add some reporting requirements. This would apply from 1 July 2025 if legislated.
  1. Superannuation on Commonwealth Paid Parental Leave is proposed to commence from 1 July 2025.

For full details, we recommend the Chartered Accountants commentary.

As with any budget, it’s important to note that these are proposed measures only. They are not yet law, and generally lack detail until the legislation is drafted and put before parliament. The exception of course are the stage three tax cuts and the increase in the Medicare Levy threshold change. These were legislated earlier in the year.

Disclaimer

The content provided in this newsletter article is for informational purposes only and does not constitute financial advice. While we strive to ensure accuracy, we recommend that readers consult with a licensed financial advisor or seek professional guidance specific to their individual circumstances. The information presented here may not cover all aspects of superannuation regulations or tax implications. It is essential to conduct further research and consider seeking personalised advice before making any financial decisions related to superannuation. Grenfell Murray Pty Ltd disclaims any liability arising from reliance on the information contained in this article. Readers should exercise due diligence and verify details independently. We do not endorse any specific products, services, or investment options mentioned herein. Remember that superannuation laws and regulations can change, and individual situations vary. Always consult with professionals who are up to date with the latest developments in superannuation.

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