The ‘Ace in the Hole’ of the 2023-2024 Federal Budget was the $4.2 billion surplus, the first in 15 years.
The Federal Budget at a glance
The surplus was driven by a surge in the corporate and individual tax take:
High commodity prices, inflation, and high employment have all pushed up corporate and individual tax receipts. But the gains can’t be relied on long term. The Budget is expected to deliver a deficit of $13.9 billion in 2023-24, and a $35.1bn deficit in 2024-25.
Social initiatives dominated the budget:
- Energy bill relief for some households and small business
- Encouraging doctors to offer bulk billing by tripling the incentive for children under 16, pensioners and other Commonwealth card holders
- Increases to commonwealth rent assistance
- Increases to JobKeeper and other income support payments
- Expanding access to the single parenting payment
The legislated stage 3 tax cuts legislated to take effect on 1 July 2024 remain in place.
Stage 3 radically simplifies the tax brackets by collapsing the 32.5% and 37% rates into a single 30% rate for those earning between $45,001 and $200,000.
For small businesses:
The instant asset write-off will enable multiple assets of up to $20,000 to be written-off in the year of purchase.
What was not in the budget?
There was no mention of the loss carry back rules for companies, suggesting that these rules will expire on 30 June 2023, along with the temporary full expensing rules. The loss carry back rules allow eligible companies to apply tax losses against taxable profits made in certain previous income years, rather than carrying them forward to future years.
There is no mention of the simplification of Division 7A – Division 7A captures situations where shareholders access company profits in the form of loans, payments or the forgiveness of debts. The 2016-17 Federal Budget proposed changes to reduce the compliance burden of Division 7A. These changes were initially meant to apply from 1 July 2018 but were deferred a number of times, before the Government announced that any changes would commence from the start of the income year following the date on which the changes receive Royal Assent. Aside from a Treasury discussion paper released back in October 2018, this issue remains in limbo.
The Budget also doesn’t refer to either the Skills and Training Boost or the Technology Investment Boost. These measures, announced by the previous Government, would provide a bonus deduction equal to 20% of qualifying expenditure if the legislation containing these measures is passed in its current form (Treasury Laws Amendment (2022 Measures No. 4) Bill 2022). The Technology Investment Boost is aimed at expenditure incurred between 7:30pm (ACT) on 29 March 2022 and 30 June 2023. The Skills and Training Boost is aimed at expenditure incurred between 7:30pm (ACT) on 29 March 2022 and 30 June 2024.
Timeline of initiatives
Individuals and families
| Initiatives | From |
| Energy price plan relief | July 2023 |
| Household energy upgrade fund | |
| Incentive to provide Medicare bulk billing to concession card holders and children | 2022-23 |
| Less people to pay Medicare levy | 1 July 2022 |
| Exempting lump sum payments in arrears from Medicare Levey | 1 July 2024 |
| Increasing JobSeeker | 20 September 2023 |
| Single parent payment increase | 20 September 2023 |
| Increased rent assistance | 2022-23 |
| Scheme enabling pensioners to earn more extended | |
| In-home aged care increase | 2023-24 |
| Access to home guarantee scheme expanded to friends and siblings | 1 July 2023 |
Superannuation & investors
| Initiatives | From |
| Clarifying the non-arm’s length income rules for superfunds | N/A |
| 30% tax on super earnings above $3 million | 1 July 2025 |
Business & employers
| Initiatives | From |
| $20,000 small business instant asset write-off | 1 July 2023 (to 30 June 2024) |
| $20,000 small business incentives for energy efficiency | 1 July 2023 (to 30 June 2024) |
| Lowering tax instalments for small business | 2023-24 |
| ‘Payday’ super – Increasing payment frequency of employee super | 1 July 2026 |
| Hybrid cars excluded from FBT exemption for electric cars | 1 April 2025 |
| Franked distributions funded by capital raisings start date | 15 September 2022 |
| Tax breaks for build-to-rent developments (where construction commences after 7:30pm AEST on 9 May 2023) | 1 July 2024 |
| 15% multi-national global and domestic minimum tax • 15% global minimum tax for large multinational enterprises o Income Inclusion Rule o Undertaxed Profits Rule • 15% domestic minimum tax | 1 January 2024 1 January 2025 1 January 2024 |
| Heavy vehicle user charge increase | 2023-24 |
| Tax law changes for general insurers | 1 January 2023 |
| Clean building MIT withholding tax concession extended | 1 July 2025 |
| Tax treatment of exploration and mining, quarrying and prospecting rights • Clarification of ‘exploration for petroleum’ • Clarification of tax treatment of depreciation deductions for mining, quarrying and prospecting rights | Expenditure incurred from 21 August 2013 7:30pm AEST, 9 May 2023 |
| Bringing forward tax on natural gas | 2022-23 |
| Hydrogen Headstart program | 2023-24 |
| Guarantee of Origin scheme | 2023-24 |
| Critical Technology Industry | 2022-23 |
| Support for childcare workforce | 2022-23 |
| 15% pay increase for Aged Care Workers | 2022-23 |
| Film industry location offset rebate increase | 2024-25 |
| Streamlining excise administration for fuel and alcohol | 1 July 2024 |
Governments & regulators
| Initiatives | From |
| Extending Part IVA anti-avoidance rules | 1 July 2024 |
| AAT to be replaced | 2022–23 transition |
| Small business ATO compliance • Tax agents able to lodge multiple STP forms on behalf of clients • Reduce the use of cheques for refunds • 4-year amendment period for income tax returns | 1 July 2024 1 July 2024 1 July 2025 |
| Personal income tax compliance and rental property owners under scrutiny | 1 July 2025 |
| Small business lodgement penalty amnesty | Outstanding tax statements lodged from 1 June 2023 to 31 December 2023 that were originally due from 1 December 2019 to 29 February 2022 |
| GST compliance program extended | 1 July 2023 |
| Serious Financial Crime Taskforce and Serious Organised Crime program extended and merged | 1 July 2023 |
| Anti-slavery Commissioner | 2023-24 |
Other
| Initiatives | From |
| Support for SMEs and start-ups – industry growth program | 2023-24 |
| Cybersecurity funding | 2023-24 |
| Disruptive defence technology funding | 2023-24 |
| Direct pathway for kiwis to become Australian citizens | 1 July 2023 |
| Reintroduction of work hour cap on international student visa holders | 1 July 2023 |
| International student post-study work rights extended | 1 July 2023 |
| Increase in wage expectations for temporary skilled workers | 1 July 2023 |
| Visa application charges increase | 1 July 2023 |
| $1bn to boost biosecurity | 2023-24 |
If we can assist you to take advantage of any of the Budget measures, or to risk protect your position, please let us know.
Full 2023-24 Federal Budget Summary
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