The Federal Budget for 2023 was released and we’ve summarised the changes to see what might affect you. Though it was a fairly unremarkable budget, one of the most surprising bits of news was the $4.2b budget surplus, the first surplus in 15 years, mainly driven by the government receiving higher than usual tax income.

Cost of Living & Family Support

Energy: The state and federal governments will provide $3B of relief to around 5 million households. Reductions of up to $500 for households and up to $650 for small businesses.

Renters: Households receiving Rest Assistance are set to see a 15% increase in support payments.

Increase to income support: Austudy, JobSeeker and Youth Allowance recipients will see their payments increase by $40 per fortnight, while older JobSeekers (between 55-59) will receive an additional $91.20 per fortnight.

Single Parenting Payment: For single parents, the Parenting Payment cut-off will increase from 8 years to 14 years old, meaning single parents will no longer have to transfer to the much lower JobSeeker payment when their child turns 8.

Pensioners working: The extension of the Work Bonus measure will enable pensioners to continue earning up to $11,800 without reducing their pension, until 31 December 2023.

Superannuation Changes

For Workers: Coming in from 1 July 2026, workers will be paid their superannuation at the same time as their salary. This change from quarterly payments is predicted to increase retirement savings by thousands.

For SMSFs: From 1 July 2023, the non-arms length provisions (NALI) will be amended. This means that SMSF income that is taxable as NALI will be limited to twice the level of a general expense. NALI income will exclude contributions.

For high super balances: As has been widely discussed, superannuation balances above $3M will see their concessional tax rate increase from 15% to 30%.

SG Compliance: The government will provide funding to the ATO to identify and act on superannuation underpayment.

Medicare & Health Changes

Medicare levy:  For low-income threshold for the Medicare levy has been increased (New thresholds: Singles to $24,376, for families to $40,939, for single seniors to $38,365, and for senior couples to $53,406.)

Bulk billing incentives: The bulk billing incentive for concession card holders and patients under 16 will be tripled.

Home Care packages: In-home aged care will benefit from an additional 9,500 Home Care Packages.

Small Business

Instant Asset Write-Off: For the next year, the instant asset write-off threshold will temporarily increase from $1,000 to $20,000, for businesses that have an annual turnover of less than $10M. This also applies to multiple assets.

Small Business Energy Incentive: Businesses with an annual turnover under $50M will be eligible to deduct an additional 20% of the cost of eligible assets towards electrification and more efficient use of energy. Assets will need to be first used or installed between 1 July 2023 and 30 June 2024.

Lodgement Amnesty Program: Small businesses with an annual turnover of under $10M will be able to lodge outstanding tax statements without paying failure-to-lodge penalties until 31 December 2023.
PAYG & GST Instalments: The GDP adjustment factor will halve from 12% to 6% for the 2024 income year, to support cash flow for small businesses.

Tax Changes

Tobacco: The tax on tobacco will increase by 3% per year for the next three years, to make smoking more expensive.

Multinational Tax: As part of a crackdown on tax avoidance by large foreign companies, the government is taking steps to ensure they pay a tax rate of at least 15% from January 2025.

Tax cuts: Already in place to take effect on 1 July 2024, the Stage 3 tax cuts merge the 32.5% and 37% rates into a single 30% rate for incomes between $45,001 and $200,000.

Technology & Environment

Low-interest loans for green homes: Funding will go towards 110,000 low-interest loans for households installing green energy upgrades such as batteries and solar systems.

Hybrid vehicles & FBT Exemption: From 1 April 2025, hybrid vehicles will not be classified as zero or low-emission vehicles and therefore will no longer be eligible for FBT exemption.

Hydrogen Industry: Over $2B will be committed to accelerating Australia’s hydrogen industry through the Hydrogen Headstart program, to support the clean energy industry.

Advanced Technology: $116M over 5 years will support critical technology development and support businesses in integrating techs such as quantum and AI into their operations.

Scam Crackdown: Several anti-scam initiatives will be funded, including $58M to the National Anti-Scam Centre, $17M for the removal of scam websites, and $10.9M for a new SMS Sender ID Registry.

Biosecurity focus: Over $1B over 4 years will go towards strengthening Australia’s biosecurity measures.

If you have any questions about the Budget measures, would like more detail, or have concerns about how it may impact you, please don’t hesitate to call us on 07 3852 4114 or email info@mywealthsolutions.com.au