Wish the highlights of the Budget papers were in dot points? Well, here they are:

TAX CUTS

Although this initiative has been previously announced, this is one of the big impact items of the budget.

From 1 July 2024, Australia’s new income tax rates will take effect. Both the tax brackets and the tax rates have been altered in various ways, with only the tax-free threshold remaining at $18,200.

See how your income will be affected by these changes in the table below.

2024-25 onwards 2023-24 FY Rates New Tax Rates (from 2025 FY)
0% Tax-free threshold ($18,200) Tax-free threshold ($18,200)
16%
 –
 $18,201 -$45,000
19% $18,201 -$45,000  –
32.5% $45,001 -$120,000  –
30%  – $45,001 -$135,000
37% $120,001 – $180,000 $135,001 – $190,000
45% Exceeds $180,000 Exceeds $190,000

INSTANT ASSET WRITE OFF

It’s back!

If passed, the instant asset write-off of $20,000 will be extended for a further 12 months. Small businesses (with an aggregated turnover of less than $10 million), will continue to be able to immediately deduct the full cost of eligible assets costing less than $20,000, that are first used or installed ready for use by 30 June 2025.

We never know whether the Government will continue to extend this initiative but for now we know it will end on 30 June 2025.

COST OF LIVING RELIEF

      • If passed, all Australian households will receive a $300 energy bill rebate and small businesses will receive a $325 energy bill rebate.

      • Medicare Care Levy Threshold have increased from 1 July 2023:

    Status Current threshold New threshold
    Singles $24,276 $26,000
    Family $40,939 $43,846
    single seniors and pensioners $38,365 $41,089
    family threshold for seniors and pensioners $53,406 $57,198

        • PBS freeze for the cost of certain medications (1 year for general public, 5 years for pensioners)

      NDIS

          • It’s no secret that there are a multitude of efficiencies that can be made in the NDIS system. The Government is spending $468.7 million over five years to get the NDIS ‘back on track’ and ensuring the funding goes to those that really need it.

          • Funding includes upgrading the NDIS Quality and Safeguard Commission’s information technology systems, design and consultation work to respond to findings of the Independent NDIS Review and boosting fraud detection.

        FUTURE MADE IN AUSTRALIA

            • The Government is proposing to spend $22.7bn over 10 years on initiatives and subsidies to engage in certain industries, including critical minerals, hydrogen, green metals and clean energy manufacturing, all in pursuance of the Government’s Net Zero targets and energy transformation policies.

            • Eligibility for assistance is based on a national interest framework that will ensure that Government assistance is being granted to industries that provide for future prosperity and bring manufacturing back to Australia.

            • According to the ACCC, it will be important to ensure that the assistance works as intended and does not affect the pricing of important supply chain goods.

            • There are a lot of buzz words in this initiative, so the devil will be in the detail here as further information is released regarding eligibility and implementation.

          COMPLIANCE

          For those of us that scoured the budget papers there appears to be a number of compliance and integrity measures that are being put in place to tackle fraud, non-compliance or suspicious behaviours. Here are a notable few:

              • Strengthening of foreign resident CGT regime to ensure that foreign residents pay their ‘fair share’ of tax in Australia. The devil is again in the detail here and will apply to CGT events occurring on or after 1 July 2025.

              • Increased audits into child care sector providers and the collection of child care gap fees in the Family Day Care and In Home Care sectors.

              • NDIS integrity measures (discussed above).

              • $187m over 4 years to the ATO to strengthen technologies and compliance taskforces to recover lost revenue and block suspicious activity.

            SUMMARY

            An optimistic budget but time will tell if it achieves its intended outcome. These are, of course, only proposed changes and are subject to scrutiny in parliament. The controversial blanket energy rebate will prove to be an interesting debate both from a budgetary and political perspective but also an indication of the future direction of renewable energy in Australia.

            For those that have enough of it all, from 1 July 2024, the Government will establish a new fast-track processing of passport applications for an additional fee of $100. Happy travels!