2023-2024 Federal Budget Preview
The 2023-2024 federal budget will be unveiled on May 9th this year. Keep an eye out for our budget update on the topics that really matter to you, your family and your business.
So far, we only know that the Budget will include a tax on super balances over $3 million and that the low and medium income tax offset of $1,500 will not be extended beyond 30 June 2023.
The government is attempting to strike a balance between reducing the cost of living and higher inflation.
If spending is going to be reduced during this election cycle, it should happen in the mid-term Budgets. Without a doubt, the government will review the tax system’s concessions to determine if they achieve their intended purpose and may redraw budget allocations. Some of the things to keep an eye on are:
- Stage three of the legislative tax cuts, which will reduce the tax rate from 32.7% to 30% for those with incomes between $45,000 and $200,000, is not scheduled to take effect until July 1, 2024. The government promised to maintain the tax cuts during the election, and it may be able to avoid the matter altogether by delaying the 2024–25 Budget.
- Go-ahead on the previously declared defence expenditures.
- See the joint contribution from the Business Council of Australia, the Australian Council of Trade Unions, the World Wide Fund for Nature-Australia, and the Australian Conservation Foundation for more on this topic of a viable clean energy industry.
- Productivity measures – Temporary full expensing, a productivity measure to stimulate company investment that allows a business to fully deduct the cost of depreciable assets in the first year of use, is scheduled to expire on 30 June 2023. The government may change or eliminate the quick asset write-off for small businesses.
- Investment incentives for technology and education. The previous government announced in the 2022–23 Federal Budget that it would give businesses “bonus” tax credits for investing in employee education and digital transformation.
Between 29 March 2022 and 30 June 2024, enterprises with an annual revenue of less than $50 million can take advantage of a 120% deduction for qualifying spending on external training for employees thanks to the Skills and Training Boost.
Eligible costs made to enhance or digitise business are eligible for a 120% deduction under the Technology Investment Boost. The bonus deduction is capped at $20,000 and is only applicable to expenses spent between 29 March 2022 and 30 June 2023.
However, Parliament has not yet approved the legislation. The budget this year may provide a further update on this tax legislation.