Did the Budget Provide Cost of Living Relief? Nah, Not Really.
Did the Budget Provide Small Biz Relief? Nah, Not Really.
Did We Learn Anything New? Nah, Not Really.
But in good news: no tax hikes or changes to super! Phew
With all the budget leaks beforehand, "humdrum" is the word that comes to mind for this year's budget. There’s so much that could be done, but politics is politics and with the current political environment we won't see any real (much needed) tax reform in the near future.
So, here’s our summary of the budget and the things we believe are most applicable to you (PS. this is not a comprehensive list, just the things that we think matter).
Energy Rebate for Everyone
You get an energy rebate, you get an energy rebate...everyone gets an energy rebate! But unlike Oprah’s car giveaways, it’s hard to get as excited about this one. The government is spending $3.5 billion by giving a one-off $300 energy rebate to every Australian household and $325 to small biz. Will it make a difference? You tell us.
Small Business Instant Asset Write-Off
We heard rumors it was moving to $30k, but nope, $20k it is! The $20,000 instant asset write-off is back for small biz with turnovers under $10 million for the 2024 and 2025 financial years. Any purchases over this amount get depreciated as per the norm ... small win but hey we'll take what we can get!
Stage 3 Tax Cuts
Good news, that we already knew about, but hey if it helps to alleviate some of the increased cost of living pressures we'll take it, right!
So, let's break this round of tax cuts into bite-sized chunks for you:
Reducing the 19% tax bracket to 16% (this affects incomes between $18,200 to $45,000)
Reducing the 32.5% tax bracket to 30% (this affects incomes between $45k to a new threshold of $135K - woohoo!)
Minimum income level for the 37% tax bracket to increase from $120K to $135K up to $190K (as alluded to above - heck yeah!)
Minimum income level for the 45% tax bracket will be increasing from $180k to $190k (Insert happy dance).
By adjusting tax brackets, they're ensuring more of your money stays where it belongs - in your pocket! We have a handy blog all about it that you can read here.
Super on Paid Parental Leave
Long overdue, we say! From 1 July 2025, superannuation will be paid on Paid Parental Leave. This change is significant as it helps close the super gap that often affects parents, particularly women, who take time off work to care for their newborns. It's a step towards ensuring financial security for all parents in the long run. Woohoo!
And whilst we are talking about super there will be increased funding put towards pursuing unpaid super entitlements owed by employers in liquidation or bankruptcy from 1 July 2024. We believe this is a necessary fairness measure so that employers can't duck and weave out of their responsibilities to their employees, I mean, it should have been paid on time anyway! But don't get us started, haha. 😆
HECS Rollback
We called this out in our recent blog, and we're thrilled to see some action. Remember the shock from the sky-high increase in student loans last June? (and rightly so!) To ease the pain, the Government is rolling back the CPI indexation of all HECS-HELP loans to 1 June 2023, giving them a friendlier, reduced indexation rate.
Last year’s backlash was so intense, the Government had no choice but to rethink things. Now, they’re capping indexation at the lower of CPI or the Wage Price Index. We’re still waiting on details about when the 2023 credits will hit your account or how refunds will work, but fingers crossed it’s soon.
ATO Support to Pursue Debts
The ATO’s Personal Income Tax Compliance Program will be extended, with an extra $44 million in funding. This means the ATO will continue its recent aggressive stance on pursuing debts cos there's a whole heap of them!
PS. If you have an ATO debt we highly recommend you read our blog on what to do.
PPS. Don't stick your head in the sand like an ostrich.
Interestingly, there’s also a proposal to limit the ATO’s ability to recover really old debts (ie, the ATO would have the discretion to not use a taxpayers refund to offset old tax debts that had previously been put on hold prior to 1 Jan 17). Seems counterintuitive, but hey, take what you can get!
Some Things To Look Out For
A Future Made in Australia: Watch This Space!
Hold onto your hats, folks, because the government’s latest package is as clear as mud. With a shiny new focus on "priority industries," they're looking to push investments to the industries of clean energy, resources, and human capital. Sounds fancy, right? But what does it actually mean? Your guess is as good as ours!
We were hoping for more juicy details in the budget, but nope, we're left hanging. So, keep your eyes peeled – this could be a golden opportunity for you and your business. Stay tuned!
Green Dreams and Tax Schemes
On the road to net zero, the government is rolling out new tax incentives for green hydrogen and critical mineral production. Plus, they’re throwing some cash at Aussie-made batteries and solar panels. But wait, there’s more! They're also launching an Energy Efficiency Grant program for small biz, offering up to $25,000 to upgrade your appliances and heating/cooling systems.
The details are still a bit fuzzy on how these incentives will work and how you can get your hands on them. But hey, if you're in the green biz, this might just be your time to shine! Keep an eye out – this could be the break you’ve been waiting for. 🌱💡
Signing off
So there you have it, our not so 'humdrum' budget wrap up that we hope we've been able to spice up for you, and hey you got to the end so we must have been doing something right! 😉
PS. The above is not yet legislated so keep that in mind. 🤔
And as always if you need to know how this will impact you personally? Feel free to reach out to one of our oh so cool not nerdy at all team members to get the downlow.
Disclaimer: The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice
Comentarios