2024-25<br />FEDERAL BUDGET
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On 14 May 2024, Treasurer Jim Chalmers handed down his third Federal Budget.

Against the backdrop of inflationary pressures and the weakest Australian economy in more than two decades, Dr Chalmers stated that the 2024-25 Budget was for the “here and now and the decades to come”. With an election likely in the next 12 months, the Federal Government expressed that this Budget invests in the promise and potential all Australians can achieve together.

The Budget forecasts a surplus in the 2023-2024 year, followed by larger deficits than expected across the next four years. Cost-of-living relief was front and centre in the 2024-25 Budget, with electricity bill rebates for households and businesses, social housing investment, rent assistance, and the Stage 3 tax cuts. From 1 July 2025, payment of superannuation on paid parental leave will commence, adding to the reforms that have already been legislated.

The Government also unveiled the Future Made in Australia Act and plans to spend $22.7 billion over the next decade on initiatives like tax incentives for green energy, domestic manufacturing of solar panels and battery production.

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.

Federal Budget Alert

A succinct summary of the announcements

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"In an uneventful Budget the most interesting new announcements are yet another 12-month extension of the $20,000 instant asset write-off for small businesses and the energy rebates for individuals ($300) and small businesses ($325) to be paid in the 2024-25 year.”
Peter Bembrick
Partner, Tax Consulting & National Tax Committee Leader

Key Measures

Stage 3 tax changes confirmed

The Government did not announce any further changes to personal tax rates and they remain unchanged for 2024-25.

Key points included:

  • The Stage 3 tax changes commence from 1 July 2024
  • No changes were made to the low income tax offset (LITO) in the 2024–2025 Budget
  • The Government will help waive student debt for 3 million graduates.

Cost-of-living relief extended to small business

The Government provided some support for small business, mainly through the extension of the instant asset write-off and energy bill relief.

Key points included:

  • $20,000 instant asset write-off for small business extended to 30 June 2025
  • $325 electricity rebate to small business
  • Improvements to Payment Times Reporting for small businesses
  • Tax incentives to accelerate investment in Australia's critical minerals and hydrogen processing and production capabilities
  • $625 million to help farmers reduce emissions and prepare for climate change.

Super on paid parental leave confirmed

The Budget confirmed the proposal to pay superannuation on Government-funded paid parental leave (PPL) for births and adoptions on or after 1 July 2025. From that time, the super guarantee (SG) rate will be 12% (up from 11.5% for 2024–2025).

In the lead-up to the Budget, the Government had announced that from 1 July 2026, employers would be required to pay their employees' super guarantee (SG) at the same time as their salary and wages. Referred to as "payday super," no further details were provided except for the commitment to funding to improve unpaid super in bankruptcy.

Enhanced security & ATO powers

The Government proposed to further invest in the ATO to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems.

Key points included:

  • The Government will tighten the capital gains tax rules for certain disposals by foreign residents with effect from 1 July 2025
  • The Government will extend the time the ATO has to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation
  • The ATO Shadow Economy Compliance Program will be extended for two years from 1 July 2026
  • The ATO's information and communications technologies to be upgraded to enable the ATO to identify and block suspicious activity in real time
  • The ATO Tax Avoidance Taskforce to be extended for two years until 1 July 2026. The Taskforce focuses on multinationals, large public and private businesses and high-wealth individuals.

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