On 9 May 2023, Treasurer Jim Chalmers handed down the 2023-24 Federal Budget.

It follows the Treasurer’s “mini-budget” in October, which was released five months after Labor won the May election. Amid the backdrop of economic instability and cost of living pressures, the Government delivered the first budget surplus in 15 years.

Dr Chalmer’s message to Australians was that this was a Budget that lay the foundations for growth and prosperity. The 2023-24 Federal Budget focused on cost-of-living relief through electricity bill support, cheaper childcare, rent assistance and an increase to JobSeeker payments. There was also historic investment in Medicare, defence and energy transition.

HLB Mann Judd’s Federal Budget Alert provides a succinct summary of the announcements related to personal and business taxation, tax compliance and superannuation.

Contact our advisers should you wish to learn more or prepare for any matters which may affect your business or personal situation.

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    Key Budget Measures

    The Government provided some support for small business, mainly through a temporary extension of the instant asset write-off and also through energy bill relief as a part of its broader $14.6 billion cost-of-living relief package.

    Key points include:

    • Small business instant asset write-off threshold to increase to $20,000 for 2023–2024
    • Energy bill relief to 1 million small businesses – saving up to $600 per year
    • Small business energy incentive for businesses with a turnover of less than $50 million

    There was no extension of the Loss Carry Back Rules, which will cease to be available after 30 June 2023. These rules have proved very useful to some businesses.

    LMITO End Federal Budget

    No major personal tax reforms were announced in the Budget. Personal tax rates remain unchanged for 2023-24.

    Other key points include:

    • The Stage 3 tax changes commence from 1 July 2024, as previously legislated
    • The Government will exempt eligible lump sum payments in arrears from the Medicare levy from 1 July 2024.

    The Government confirmed it intends to implement superannuation tax changes for individuals with account balances above $3 million from 1 July 2025, including in relation to defined benefit schemes. Under the proposed changes, individuals with total superannuation balances (TSBs) over $3 million at the end of a financial year will be subject to an additional tax of 15% on earnings from 1 July 2025.

    Superannuation Reform Federal Budget

    The Government will move forward with its pre-election promise to make changes to multinational taxation. Multinationals operating in Australia will need to prepare for the Global Anti-Base Erosion (GloBE) Rules for the income years commencing on or after 1 January 2024. The Rules will impose a 15% minimum tax rate.

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