Australia’s Federal Budget 2023-24

Source: www.charteredaccountantsanz.com

The Federal Budget that was announced on May 9th brings some noteworthy changes. After 15 years in the red, Australia is projected to have a surplus of $4.2 billion for the current financial year. However, this surplus will be temporary, as a deficit of $13.9 billion is expected for 2023-24, followed by a larger deficit of $35.1 billion in 2024-25.

Below are some key highlights regarding taxes and retirement savings from the Budget that can assist you and your business in organising your financial plans.

➡ Small Business instant asset write-off
Small businesses can choose to immediately write off the full cost of assets that are priced below $20,000. This opportunity applies when the assets are used, installed, and ready to be used between July 1, 2023, and June 30, 2024. It allows small businesses to deduct the entire cost of these assets right away instead of spreading out the deduction over time.

➡ Small Business Energy Incentive
Businesses with an annual turnover of less than $50 million can receive an additional 20% deduction on their expenses. This deduction is specifically aimed at supporting the adoption of electrification and improving energy efficiency. It applies to eligible assets or upgrades that are put into use or installed between July 1, 2023, and June 30, 2024.

➡ Superannuation to be paid with wages
Commencing July 1, 2026, employers will be required to pay superannuation on the same day as their employees’ payday, rather than on a quarterly basis. While there is a three-year period for businesses and retirement funds to prepare for this new system, it is advisable to begin the preparations earlier to ensure a smooth transition.

➡ PAYG and GST instalment uplift factor
For the 2023-24 financial year, the pay-as-you-go (PAYG) and Goods and Services Tax (GST) instalment GDP adjustment factor will be reduced to 6% from the previous 12%.

➡ Non-arm’s length income (NALI)
Penalties for tax violations associated with non-arm’s length expenses will continue to be applicable to self-managed superannuation funds and small APRA funds, although at a reduced rate. On the other hand, large APRA funds are now completely exempt from these penalties.

➡ ATO compliance program
The Australian Taxation Office (ATO) has been granted additional funds to enhance compliance efforts in areas such as personal tax, GST, and tax debt collection. This expenditure is expected to generate approximately $9.1 billion over a five-year period.

To delve deeper into the details of the 2023-24 Federal Budget, please click here:
https://taxopia.com.au/wp-content/uploads/2023/05/Budget-2023-24-Taxopia.pdf

Should you require any additional assistance please don’t hesitate to contact us.

Other Articles of Interest:

• April 2023: No more Low and Middle-Income Tax Offset (LMITO) to lower tax bills or increase tax refunds.