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  • Writer's pictureAndre Dirckze

2023-24 Federal Budget wrap up

Here's what we think this budget signifies for you .

As many Australians struggle with rising interest rates and living costs, Tuesday night's Federal Budget included many suggestions aimed at lowering the cost of living.


Along with changes to support payments, energy bill rebates, and assistance with out-of-pocket health costs, Australian Treasurer Jim Chalmers announced a number of other proposals, including 'pay day super', raising the tax rate on earnings on balances over $3 million, expanding the Home Guarantee Scheme, and providing a $20,000 instant asset write-off for small businesses.


Remember that many of these recommendations may alter as legislation is debated in parliament. Legislation approved by the Australian Parliament is not legally binding until it is formally acknowledged by the Governor-General. The procedure is known as Royal Assent.


Superannuation

From 1 July 2025


The tax on earnings on balances over $3 million will be increased.


The government is lowering super tax breaks for persons with a total balance of more than $3 million, raising the headline tax rate to 30% (from 15%). The increased tax rate applies exclusively to earnings equivalent to the fraction of a person's super that exceeds $3 million.

Payday super is now available.

1 July 2026


Employers must make super contributions on the same day they pay their employees' salaries and wages. They currently just have to contribute to super once a quarter.


According to the government, this would increase a 25-year-old median salary earner's retirement savings by $6,000.


This will mostly assist lower-wage workers and those in temporary or precarious employment, many of whom are women.


Small Business

1 July 2023 


$20,000 Instant Asset Write-Off


Tax benefits for small businesses that write off multiple assets.


The government will enhance cash flow for small firms by temporarily raising the instant asset write-off threshold to $20,000 for companies with less than $10 million in annual revenue.


Aged Care

Reforms to aged care from now 2022-23 and over the next five years


The government is increasing resources to:


Increase the remuneration of many aged care workers by 15%;

provide an additional 9,500 Home Care packages;

continue COVID-19 initiatives; tighten regulation; and delay the new 'Support at Home Programme' and extend grant arrangements for the 'Commonwealth Home Support Programme' for 12 months.


Housing Affordability

Expansion of the Home Guarantee Scheme - 1 July 2023:


To increase participation, siblings, friends, and other family members will be able to use the government's first-time home buying programmes jointly. The extended eligibility will allow any two qualified people to apply for a guarantee together.


The First Home Guarantee, Regional First Home Guarantee, and Family Home Guarantee are all included.


People who have not owned a home in the last ten years will also be eligible for the Home Guarantee Scheme.


The NHFIC can provide more information on the Home Guarantee Scheme.


Tax

Increasing Medicare Levy low-income thresholds 1 July 2022


Low-income taxpayers will generally continue to be exempt.


- Singles will be increased from $23,365 to $24,276

- Families will be increased from $39,402 to $40,939

- Single seniors and pensioners will be increased from $36,925 to $38,365, and

- Families (seniors and pensioners) will be increased from $51,401 to $53,406.

- For each dependent child or student, the family income thresholds increase by a further $3,760.


No change to the Income tax rates - 1 July 2024

Social security and families


Reducing energy bills

Starting 2023-24 for two years


Eligible households will receive a rebate of $500 per year and eligible small businesses $650 per year on their power bills.


Reducing health costs

Provided over 5 years from 2022-23


The Government will invest $3.5 billion over five years to triple the bulk billing incentive for GP consultations for children under 16 and Commonwealth concession card holders. This will support 11.6 million eligible Australians to access a doctor with no out-of-pocket costs.


Increasing income support payments

Proposed effective date: 20 September 2023


The Government will increase working age and student payments by $40 per fortnight. So, a single person (under age 60) receiving a typical total rate of Job Seeker Payment (JSP) of $701.90 per fortnight will start to receive approximately $733.10.


Also, JSP recipients aged 55 and over (currently 60 years) who have been on payment for 9 continuous months will receive the higher maximum rate of approximately $785.20 . This reflects the increased difficulties that people in this age range have in securing re-employment.


Increasing help for renters

20 September 2023


The maximum rate of Rent Assistance (RA) will increase by 15%. This means a single person with no dependent children currently receiving the maximum RA payment of $157.20 per fortnight will start to receive $180.80, as well as their income support payment.


Expanding access to Parenting Payment (single)

20 September 2023


Eligible single parents will now receive the Parenting Payment (single) until their youngest child turns 14, up from 8 years old.


This is expected to benefit 57,000 single principal carers, including 52,000 women. It will make these single parents $176.90 per fortnight better off rather than transferring to the Job Seeker Payment.

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