If you missed it, the 2024 Federal Budget was announced on Tuesday 14 May 2024, with a heavy focus on cost-of-living including assisting States and Territories to build new houses and student accommodation. Clean energy was also a large focus point $22.7 Billion to be exact. There were no new tax or superannuation changes announced, and the previously announced Stage 3 Income Tax cuts were confirmed to begin on 1 July 2024.
With this in mind, we have created a summary of the budget updates, this is a brief summarisation of the update, the full budget documents can be found here. We want to make sure you get the most from this update, at the end of this blog are next steps in what you can do to get the maximum benefits from the budget announcement so make sure to read to the end!
Now onto what was released.
Businesses
- Small Business Instant Asset Write Off: Small businesses, with an aggregated turnover of less than $10 million, will continue to be able to immediately deduct the cost of eligible assets costing less than $20,000 until 30 June 2025. Please note this is a tax deduction and not $20,000 cash back to you.
- Small Business Energy Rebate: The Government will provide a $325 energy rebate to eligible small businesses on their 2024/25 energy bills to provide cost of living relief. This won’t be a cash payment – but it will be a quarterly payment to your energy company by the Government.
Individuals
- Household Energy Rebate: The Government will provide a $300 rebate to all Australian households on 2024/25 energy bills to provide cost of living relief. This won’t be cash to you – but it will be a $75 quarterly payment to your energy company by the Government.
- Medicare Levy Low-Income Thresholds Increased: The Government will increase the Medicare Levy low-income threshold for everyone from 1 July 2023. This means all individuals will now pay slightly less tax.
- Revised Stage 3 Tax Cuts for Individuals: The Government confirmed the revised Stage 3 Tax Cuts will begin on 1 July 2024. Here is a summary of the tax cuts you and your employees will receive based on your earnings. More money in your pocket each week!
- Deeming Rate Freeze Extended: The deeming rate is the Government’s assumed return on a retiree’s investments The top rate of deeming will be held at 2.25% for another 12 months. Half a million pensioners can relax, the deeming rate is staying unchanged for next year.
- Supporting Students – Lower HECS Indexation: The Government will cut $3 billion in student debt for more than 3 million Australians. The Government will cap the HELP indexation rate to be the lower of either the Consumer Price Index or the Wage Price Index – expected to be around 4% for 2024 instead of 4.7%. The Government will backdate this relief to all HELP, vocational education and training (VET) Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on 1 June 2023. Your HESCS / Student Loan may grow over time if no compulsory or voluntary repayments are made.
Superannuation
- Increased Employer Super: While this isn’t a Budget announcement, this is a good opportunity to remind you that as an employer you are required to pay 11.5% of your staff’s salary (up from 11%) into your superannuation from 1 July 2024. Please remember if your employee has a salary package that is inclusive of super, then their take-home pay effectively reduces by 0.5% from 1 July 2024. But remember this will be offset by the Stage 3 personal tax cuts also coming into effect on 1 July 2024.
- New Super Contribution Caps: While there were no superannuation reforms contained in this year’s Budget, the super contribution caps were given an inflation adjustment. The tax-deductible super cap will increase from $27,500 to $30,000 on 1 July 2024. The non-tax-deductible super cap will increase from $110,000 to$120,000 per year. You will be able to contribute $2,500 more into super as a tax deduction from 1 July 2024.
NEXT STEPS
To get the maximum benefits from the new measures announced in the 2024 Federal Budget, please contact us immediately to book in your 2024 Tax Planning meeting with us.
In your 2024 Tax Planning meeting, we plan to discuss these topics with you:
- Saving tax for 2024 and planning for your 2025 tax payments.
- How your business is performing as we enter another year of high inflation and high interest rates.
- Keeping your wealth in your family “bloodline” with advanced Estate Planning and Asset Protection strategies.
- Australia is currently facing a turbulent financial future, with inflation and interest rates still high as the nation faces a housing crisis.
With this uncertain future, it’s important that you try to build up a cash reserve and ensure your business and personal finances are in good order.
Our expert team of accountants are here to help you.