NOBLE TAX GROUP
Federal Budget 2023-2024 Snapshot
On 9th May, Federal Treasurer Dr. Jim Chalmers delivered his second budget for FY 2023-2024.
Below is the snapshot of Federal Budget 2023- 2024 from tax and super perspective. 1 Energy Boost to Small Business: The Government has announced a bonus 20% deduction for small business (turnover less than $ 50 million) for expenditure that supports electrification and more efficient use of energy. The bonus is capped at $ 20,00 per annum
and to assets first used or installed ready for use between 1st July 2023 and 30th June 2024.
2 Superannuation to be paid with wages: From 1st July 2026, employers will be required to
pay superannuation on payday, rather than at least quarterly.
3 Instant assets write-off: small businesses will be able to access the instant asset write-off for assets costing less than $ 20,000 if they are used or installed ready for use between 1 July 2023 and 30 June 2024.
4 Carry- back losses: The 2022- 2023 income year is the final year for which eligible entities can carry- back losses to prior years
5 Temporary Full Expensing: There is no extension to Temporary Full Expensing, which will finish on 30 June 2023.
6 Budget is in Black this year: There is a $ 4.2 billion surplus for the current financial year, with the predicated deficit of $ 13.9 billion expected in the next year.
7 Capital Allowance: For eligible new build- to rent – projects where construction `commences after 7:30 pm (AEST) on 9 May 2023, the Government will:
• Increase the rate for the capital works tax deduction to 4% per year; and
• Reduce the final withholding tax rate on eligible fund payments from managed
Investments in trust (MIT) investments range from 30% to 15%.
This measure will apply to build-to-rent projects consisting of 50 or more apartments or dwellings made available for rent to the general public. The dwellings must be retained under single ownership for at least 10 years before being able to be sold and landlords must offer a lease term of at least three years for each dwelling. The reduced managed investment trust withholding tax rate for residential build-to-rent will apply from 1 July 2024.
8 Increasing the Medicare levy low-income thresholds: The Government will increase the Medicare levy low-income thresholds for singles, families seniors, and pensioners from 1
July 2022 as follows:
• The thresholds for singles will be increased from $ 23,365 to $ 24,276
• The family threshold will be increased from $ 39,402 to $40,939
• For single and pensioners, the threshold will be increased from $ 36,925 to $38,365.
• The family threshold for seniors and pensioners will be increased from $ 51,401 to $53,406
For each dependent child or student, the family income thresholds will increase by a further $ 3,760 instead of the previous amount $ 3,619.
9 Tax on Super: From 1 July 2025, earnings on balances exceeding $3 million will attract an increased concessional tax rate of 30 percent. Earnings on balances below $ 3 million will continue to be taxed at the concessional tax rate of 15 percent.
