Australian Federal Budget 2023-24 - Supporting Businesses and Individuals
Australian Federal Budget 2023-24 - Supporting Businesses and Individuals
On 10 May 2023 the Australian Federal Government released its budget for the fiscal year 2023-24. The budget aims to support economic growth and development while addressing various social and environmental challenges. Let’s explore the recent outcomes from the Australian Federal Budget 2023-24.
Tax Breaks for Small Businesses
One of the key points of the budget is the reinstatement of the Instant Asset Write-Off. Although not as expansive as its previous unlimited form, this measure will benefit businesses with an annual turnover of less than $10 million. Starting from the 2023-2024 financial year, these businesses will have the opportunity to immediately deduct the entire cost of eligible assets costing less than $20,000. This reinstated Instant Asset Write-Off provides a valuable opportunity for small businesses to invest in necessary assets and stimulate growth.
Support for Australian Manufacturers
The Government has allocated $1 billion towards supporting Australian manufacturers. This investment will help create jobs and increase economic growth, particularly in the wake of the COVID-19 pandemic. The Government hopes that this investment will help to revive the manufacturing industry in Australia and make it more competitive on a global scale.
Reducing Red Tape for Businesses
The Government plans to reduce red tape and simplify regulations for businesses which will lower compliance costs and increase productivity. This initiative is expected to provide relief to businesses across the country, particularly small businesses that have been struggling to keep up with the ever-increasing compliance requirements.
Some strategies helping reduce red tape include conducting regulatory reviews, embracing digital transformation, harmonising regulations, assessing compliance costs and providing advisory services to small businesses. These efforts aim to simplify regulations, lower compliance burdens and create a more favourable business environment. By streamlining processes and reducing administrative requirements, businesses, especially small ones, can focus on growth and innovation.
Low and Middle-Income Earners
The Low and Middle-Income Tax Offset (LMITO) is no longer available in the current 2022-23 income year and future years. However, the Low Income Tax Offset (LITO) is still available in the 2022-23 financial year, providing a tax offset of up to $700 for individuals earning less than $66,667.
Under the proposed stage 3 of the Government's personal income tax plan, which is to come into effect from 1 July 2024, the current 37% tax bracket will be removed. Instead, all taxpayers earning over $45,000 and up to $200,000 will pay a marginal tax rate of 30%. Taxpayers with income over $200,000 will be subject to a 45% marginal rate of income tax.
Payday Super
The Government has introduced a significant superannuation reform known as payday super. From 1 July 2026 employers will be mandated to make superannuation contributions to their employees on each payday, marking a departure from the current practice of quarterly payments. This change aims to ensure that superannuation contributions are made more frequently, allowing employees to access their retirement savings in a timely manner. By aligning superannuation payments with pay cycles, employees will benefit from improved cash flow and greater transparency regarding their superannuation contributions. This reform reinforces the Government's commitment to enhancing the retirement savings system and promoting financial security for Australian workers.
Investment in Childcare Services
The budget includes an allocation of $1.1 billion towards improving childcare services, which will make childcare more affordable and accessible for families. This investment will particularly benefit low and middle-income families and provide relief to parents struggling with the high cost of childcare. The Government hopes that this investment will help to increase workforce participation among women, particularly in rural and regional areas.
Support for Mental Health Services
The Government plans to increase funding for mental health services, particularly in the wake of the COVID-19 pandemic. This investment will help to improve access to mental health services for those who need it the most and provide relief to those who have been struggling with their mental health during these challenging times.
Investment in Support Services for Victims of Domestic and Family Violence
The budget includes an allocation of $1.1 billion towards improving support services for victims of domestic and family violence. This investment will help to improve access to support services for those who have been impacted by domestic and family violence and provide relief to those who have been struggling with the effects of this violence.
Overall, the Australian Federal Budget 2023-24 includes measures designed to support both businesses and individuals. The tax breaks for small businesses and tax relief for low and middle-income earners is designed to encourage investment and provide some relief. The investments in childcare services, mental health and support services for victims of domestic and family violence are seen as welcome moves.
