There were few surprises in this year’s Federal Budget, with most of the big news – primarily the changes to personal tax rates – already announced by the Government.

Some upcoming changes that will affect individuals, and businesses, include:

Superannuation and personal tax

As the government flagged, the main focus of the Budget was on “cost of living” measures.

The main updates and changes were:

Energy bill payments

All Australian households will receive a $300 rebate on their energy bills in the next financial year. This is not means tested, and will be paid to every household, including holiday homes.

Deeming rates

The freeze on the social security deeming rate was extended for another year. This rate is used by the government to calculate how much income people earn from their investments, including superannuation. It will stay at 2.25 per cent for at least another 12 months, meaning people will remain eligible for the same level of pension payments.

Super on paid parental leave

As previously announced, the Government will pay superannuation on top of paid parental leave from 1 July 2025, when the super guarantee rate will increase to 12 per cent.

In addition, paid parental leave will be extended. This will be added incrementally, so that from 1 July 2024, families will get an extra two weeks of leave, for 22 weeks in total. This will increase to 24 weeks from July 2025 and 26 weeks from July 2026.

Personal tax rates

In the Budget, the government also reiterated that the stage 3 tax cuts will be implemented from 1 July 2024, with no other changes announced.

The stage 3 tax changes will see all 13.6 million taxpayers receive a tax cut. From 1 July, the tax rates and income thresholds will be:

Taxable income Tax rate
$0 – $18,200 Nil
$18,201 to $45,000 16% of excess over $18,200
$45,001 to $135,000 $4,288 plus 30% of excess over $45,000
$135,001 to $190,000 $31,288 plus 37% of excess over $135,000
More than $190,001 $51,638 plus 45% of excess over $190,000
Medicare levy

The Medicare levy low-income threshold for singles will increase to $26,000 for 2023–2024. For couples with no children, the family income threshold is $43,846, while each dependent child or student adds $4,027 to the threshold.

For single seniors and eligible pensioners, the Medicare levy low-income threshold is $41,089. The family threshold for seniors and pensioners is $57,198, plus $4,027 for each dependent child or student.

Business tax and super

Instant asset write-off

The main change for businesses in the Federal Budget was that the instant asset write-off concession was extended for another 12 months.

The concession applies to businesses with turnovers capped at $10 million and allows them to immediately deduct the full cost of eligible depreciating assets costing less than $20,000.

Energy bill payments

Like households, small businesses will receive energy bill relief, with a $325 rebate on 2024-2025 bills.

Tax compliance

The Government has introduced several measures to improve tax compliance, giving the ATO greater powers to track down delinquent tax and combat fraud.

These include:

  • Extending the time the ATO has to notify businesses if it intends to investigate a business activity statement (BAS), from 14 days to 30 days
  • Providing funding to the ATO ($187 million over four years) to better detect, prevent and mitigate fraud in the tax and superannuation systems
  • Extending the ATO Tax Avoidance Taskforce for two years. This taskforce focusses on multinationals, large public and private businesses and high-wealth individuals.
Super compliance

With the introduction of payday super scheduled for 1 July 2026, the government is stepping up its activities to help ensure compliance. These include:

  • Funding to better pursue unpaid super in bankruptcies or liquidations
  • Stepping up investment in the ATO’s data matching capability to increase super guarantee payment compliance.

This article was first published in Financial Times – Winter 2024.