The Federal Budget for 2023-24 year has been released with a number of measures included to continue the economic support for Australian’s.
Key measures included in the Budget are:
- Small business asset write-off
- Small Business Energy Incentive
- Superannuation tax
- Change to super guarantee contributions
- Further economic support payments for eligible welfare recipients
Please note that these measures still need to pass legislation.
Immediate Asset Write-Offs Capped at $20,000
Small businesses, i.e., those with aggregated annual turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.
Small Business Energy Incentive: 20% Bonus Deduction
The Small Business Energy Incentive will provide businesses with annual turnover of less than $50 million an additional 20% deduction on spending that supports electrification and more efficient use of energy.
The Small Business Energy Incentive will apply to a range of depreciating assets, as well as upgrades to existing assets. These will include assets that upgrade to more efficient electrical goods such as energy-efficient fridges, assets that support electrification such as heat pumps and electric heating or cooling systems, and demand management assets such as batteries or thermal energy storage.
Individuals with total superannuation balances (TSBs) over $3 million at the end of a financial year will be subject to an additional tax of 15% on earnings from 1 July 2025. Earnings will be calculated with reference to the difference in TSB at the start and end of the financial year, adjusting for withdrawals and contributions. This means that the proposed additional 15% earnings tax on an individual’s balance above $3 million will operate on an accruals basis and include any notional (unrealised) gains and losses.
Super to be paid on employees’ payday from 1 July 2026
The Government’s intention to require all employers to pay their employees’ super guarantee at the same time as their salary and wages from 1 July 2026.
Further Economic Support
The Treasurer announced a package of cost of living measures, including up to $3 billion in energy bill relief (expected to reduce power bills by up to $500 for 5 million households) and $1.3 billion for home energy upgrades.
Access to the Parenting Payment (Single) will also be extended along with increased payments for JobSeeker, Youth Allowance and rent assistance.