Budget Update 2024-2025

Last night the 2024-2025 Federal Budget was announced. We cannot remember a budget with less for the accountants in the room to sort out! That being said, there are several measures that could impact you.

Overall take: the intention seems to be to provide some cost-of-living help, whilst also driving down inflation (in the short-term at least). The government is trying to tempt the RBA board to reduce interest rates sooner rather than later, in turn helping to reduce mortgage stress and therefore also the stress of the politicians!

Specific measures that may impact you include:

• Stage 3 Tax Cuts – commence from 1 July 2024. We are not really counting this as a budget announcement, seeing as it was already announced and in law. See our article written in January 2024.
• The $20,000 instant asset write off for small business has been extended to 30 June 2025 with the same conditions that have been in place throughout the 2024 financial year.
• Increases to existing rent assistance (delivered by Services Australia).
• Foreign Resident CGT Rules – the Government are yet to issue a consultation paper on this however we expect entities with Australian land holdings to be impacted where they have a foreign investor.
• Thresholds for the following have been increased modestly:
  • Medicare levy low income threshold (income below which you do not pay any medicare levy)
  • “SAPTO” – the offset available to assist senior Australians to earn more income before they pay tax
• Superannuation is payable on Government Paid Parental Leave for births or adoptions from 1 July 2025.
• Importantly – no further changes to superannuation or SMSF’s, noting that the changes we wrote about in March 2023 are still expected to be introduced as drafted.
• HELP loans will be indexed each year using the Consumer Price Index (CPI) or Wage Price Index (whichever is lower), rather than just CPI as was previously the case. This is effective backdated to 1 June 2023, when the last indexation occurred.
• Energy Rebate – $300 rebate for all Australian Households and $325 rebate for all businesses with a small customer electricity plan during the 2024-2025 financial year. This measure is aimed at reducing the inflation reading (at least in the short-term!).

If you have any questions or would like more information regarding the proposed tax changes announced in the 2024 – 2025 Budget please do not hesitate to contact us.

– David Gorman and James Davis

Posted 15.05.2024

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.