Federal Budget 2023-2024

On Tuesday 9th May the Australian public received the 2023-2024 Federal Budget.

The overall economic outlook was an improvement in the cash balance and net business debt resulting in a $4 billion surplus. In addition, Treasury is forecasting the economy to slow over the coming 2 years.

Please read on below for key takeaways on the budget initiatives and, as always, our consultants are here to help, so reach out to us to have a conversation about how the budget initiatives can fit in to your circumstances and financial goals.

Individuals

• Concessional superannuation rate - From the 2026 financial year the tax rate applied to future earnings for balances above $3 million will be 30% (up from 15%)

• Super Guarantee payments – from 1 July 2026 employers will be required to pay their employees SG entitlements at the same time as their salary and wages

• Cost of living measures – a numbers of measures introduced including energy bill relief for eligible households, increase to childcare subsidies, increase to payments received by single principal carers and recipients of working age payments

• Personal income tax rates – this year’s budget has confirmed the stage 3 tax cuts from 1 July 2024 representing a tax saving of up to $9,075 per person:

Business

• Build-to-rent developments – for eligible new projects where construction commences after 9.5.23 the rate of capital works deduction increases from 2.5% to 4%.

• Super Guarantee payments – from 1 July 2026 employers will be required to pay their employees SG entitlements at the same time as their salary and wages

• Instant asset write-off – This is reduced (from unlimited write offs in the previous 2 years) to only $20,000 per asset in FY24 and limited to businesses with less than $10m turnover

• Energy Incentive – additional 20% depreciation deduction for assets supporting efficient energy use for businesses below $50m turnover, capped at $100k ($20k deduction, average $7k tax saving)

• FBT Exemption – continuation of the FBT exemption for eligible plug-in hybrid cars up to 31 March 2025