Exploring Key Influences in 2024
Get ahead in 2024 with insights on key influences shaping the landscape. Explore trends and strategies for success with Bates Cosgrave experts.
As we approach 2024, uncertainties that have characterized recent years beg the question of whether a more stable landscape awaits us. This examination delves into pivotal issues and influences anticipated for the upcoming year.
Inflation and Labor Dynamics
According to RBA Governor Michelle Bullock, inflation has passed its peak and is moving in a positive direction. However, the return to the target rate might be slower than previously anticipated.
While there are positive indicators, domestic challenges persist, marked by persistent inflation, slowed growth, and a tight labor market. Additionally, uncertainty looms over the Australian economy, with concerns about the Chinese economic situation and ongoing international conflicts.
The RBA has not ruled out the possibility of further interest rate increases. Currently, the unemployment rate remains at 3.7%, and the labor market continues to be tight. Wages have experienced a 1.3% growth in the September 2023 quarter and a 4.0% growth over the year, reaching a 14-year high. The difficulty in sourcing high-skilled workers is pronounced, and employers seem unwilling to pay inflated salaries to attract talent.
Income Tax Reforms and Concessions
Starting from July 1, 2024, stage 3 tax cuts, aimed at simplifying personal income tax brackets, will come into effect. These cuts consolidate the 32.5% and 37% tax brackets into a single 30% rate for those earning between $45,001 and $200,000—assuming no changes in the May Federal Budget. The superannuation guarantee rate is set to rise to 11.5% on July 1, 2024. However, for small and medium businesses with a group turnover of less than $50m, several concessions are slated to end or revert to conventional levels. The Skills and Training Boost concludes on June 30, 2024, providing a bonus deduction for eligible training expenditures. The Small Business Energy Incentive is scheduled to end on June 30, 2024, pending parliamentary approval. This incentive aims to offer an additional 20% deduction on eligible depreciating assets that support energy efficiency. The instant asset write-off for businesses with a group turnover of less than $10m is expected to reduce to $1,000 from July 1, 2024, though legislation for this change is pending parliamentary approval.
Worker Rights and Rewards
Significant changes to workplace laws in 2023 set the stage for increased scrutiny in 2024. Notable developments include a 5.75% increase in the minimum wage to $23.23 per hour from July 1, 2023. New rules impose a two-year limit on some fixed-term employment contracts, with no option for renewal. A landmark case has provided clarity on determining worker classification, prompting the ATO to issue new rulings to ensure correct entitlement payments by employers. Employers are advised to assess contractors accurately. Additionally, greater flexibility has been introduced for unpaid parental leave.