The Federal Budget for 2023-24 was passed down this week on the 9th of May. This is the first annual budget for the Albanese government aside from their mini budget on October 2022. Even though there is a big focus on cost of living for Australians, this budget has been described as ‘measured’ as the Government grapples with trying to keep inflation down whilst bring support to those who are vulnerable.
Key Take Aways
— A budget surplus is expected for the first time in 15 years. A 4.2$ billion surplus is predicted for the 22-23 financial year
— Push towards net zero — there is a big focus on environmental incentives this budget
— Changes to Super Guarantee contributions
— Focusing on cost of living support and increase in welfare support
— Age Care workers wage increase
— Affordable Housing Focus — Largest Rent Assistance increase in 30 years, more housing being built, encouraging build-to-rent projects and investments in social housing
What’s in the budget for everyday people and households?
Household Energy Upgrade Fund
$1.3 billion Energy Upgrade for Households will give low-interest loans to people wanting to make upgrades to improve their household energy consumption.
The fund will also work with States and Territories to make energy saving upgrades to social housing which will in turn help people save on their energy bills.
Boost to Centrelink payments
Australians on support payments including JobSeeker, Austudy and Youth Allowance will have their base rate payments increased by $40 a fortnight
The JobSeeker payment will increase by $92.10 per fortnight for those over 55 and who have been on the payment for nine or more straight months. (This currently applies only to those aged over 60)
The single parenting payment will be paid until the youngest child turns 14 which is up from the current age of 8.
A 15% increase to the rent assistance payments will be provided which is an additional $31 a fortnight for about 1.1 million eligible households.
Medicare Bulk Billing Increase
More funding will be invested into strengthening medicare bulk billing incentives meaning more people will be able to access bulk billed health care.
Power Bill Rebates
5.5 million households and 1 million businesses will receive $500 energy rebates. This relief will be targeted to pensioners, Commonwealth Seniors Health Cardholders and households receiving income support including Family Tax Benefit A and B. Income limits apply.
Cheaper Child Care
From July 2023, child care costs will be cut for around 1.2 million families making it easier for parents, particularly women, to get back to work.
Early Childhood Educators and Carers
Increased funding for training and professional development for child carers and educators. The government will provide financial assistance to help people complete studies in Early childhood Education.
Changes to the Paid Parental Leave scheme
The October Budget saw the boosting of paid parental leave from 1/7/2023, enabling both parents to share the entitlements. A $350,000 family income test will be introduced as an alternative to the individual income test and there is also more flexibility regarding the payment, claim and leave periods. The expansion to 26 weeks will be phased in from 1 July 2024 to 1 July 2026.
What’s in the budget for business?
Small Business Instant asset right off changes
The depreciation has been made less generous with an end to Temporary Full Expensing (TFE) ending from 1 July 2023 and will be replaced by a $20,000 instant asset write-off. Items over 20k will be depreciated by 15% the first year, and 30% the years after.
Small business Energy Incentive
Additional 20% deduction on energy assets, eg. fridges, heat pumps and heating/cooling systems.
Improving Cashflow for Small Businesses
Eligible small businesses will have the increase in their quarterly tax instalments for GST and income tax halved in 2023-24. The increase was supposed to go up by 12% but now will only go up by 6%.
Crack down on unpaid super and tax
Funding will be provided to the ATO over four years to assist in engaging with businesses to address the growth of tax and super debts. This is targeting businesses with high-value debts .
Cyber Skills Program for Small Business
Cyber wardens program to help boost skills for small businesses.
Extra Tax on earnings over 3 Million
Superannuation earnings over 3 million will see a 15% additional tax from 1 July 2025.
Superannuation Guarantee payable on the same day as wages
Super will have to be paid at the same time as wages from the 1 July 2026. This is to ensure accountability and transparency whilst boosting savings for retirees.