Marsh Tincknell is here to decipher the complexities of the 2023-24 Federal Budget for you. This budget has been a point of interest and discussion, given its historical significance: it presents the first budget surplus in 15 years. At a staggering $4.2 billion, this achievement is the result of increased corporate and individual tax revenues, bolstered by favourable commodity prices, inflation, and high employment rates. However, it’s important to remember that these gains may be temporary, with projected deficits of $13.9 billion in 2023-24 and $35.1 billion in 2024-25.

Social Commitments Shine Through

This budget emphasises social commitments. Here are a few key points:

Energy Expense Ease: Plans are in place to lighten the load of energy costs for households and small businesses. Bulk Billing Boost: To motivate physicians to provide bulk billing, the budget triples the incentives for children under 16, pensioners, and other Commonwealth card holders. Support for Rent and Income: Anticipated increases in Commonwealth rent assistance, JobSeeker, and other income support payments are on the horizon. Assistance for Single Parents: The budget plans to widen access to the single parenting payment, offering more help for single parents.

Tax Adjustments and Aid for Small Businesses

In the taxation arena, the stage 3 tax cuts are due to come into effect from 1 July 2024. This adjustment will consolidate the 32.5% and 37% rates into a single 30% rate for those earning between $45,001 and $200,000.

Small businesses haven’t been overlooked in this budget. The instant asset write-off will enable businesses to deduct the cost of numerous assets up to $20,000 in the year of purchase, stimulating investment and business expansion.

Significant Exclusions: A Closer Look at What’s Missing

Despite these provisions, several crucial issues were noticeably missing from the budget. The omission of loss carry back rules for companies and the clarification of Division 7A might indicate upcoming changes in these areas.

The loss carry back rules, due to expire on 30 June 2023, currently allow qualifying companies to offset tax losses against taxable profits from certain previous income years. The Division 7A rules, which manage situations where shareholders extract company profits as loans, payments, or debt forgiveness, have been in limbo, with proposed changes being deferred repeatedly.

Additionally, the budget made no mention of the Skills and Training Boost or the Technology Investment Boost. If passed in its current form, these initiatives from the previous Government would offer a bonus deduction equivalent to 20% of qualifying expenditure.

Wrapping Up

The 2023-24 Australian Federal Budget is a blend of financial prospects and hurdles. As always, comprehending the budget and its potential implications for your personal and business finances can be complicated. That’s where Marsh Tincknell comes in.

Whether you need assistance in understanding the budget’s potential effects, want to capitalise on any budget provisions, or need to safeguard your position, our team is prepared to support you.

Click here to download our 2023-24 Federal Budget guide for clients