Federal Budget Overview: 2023-24

Federal Treasurer Jim Chalmers handed down his first Federal Budget on Tuesday night. The ‘ace in the hole’ of the 2023-24 Federal Budget was the $4.2bn surplus; the first in 15 years.

The surplus was driven by a surge in the corporate and individual tax take. High commodity prices, inflation and high employment have all pushed up corporate and individual tax receipts. But, the gains can’t be relied on long term. The Budget is expected to deliver a deficit of $13.9 billion in 2023-24 and a $35.1bn deficit in 2024-25.

Social initiatives dominated the Budget:

• Energy bill relief for some households and small businesses.
• Encouraging doctors to offer bulk billing by tripling the incentive for children under 16, pensioners and other Commonwealth cardholders.
• Increases to Commonwealth rent assistance.
• Increases to JobSeeker and other income support payments.
• Expanding access to the single parenting payment.

The stage 3 tax cuts legislated to take effect on 1 July 2024 remain in place. Stage 3 radically simplifies the tax brackets by collapsing the 32.5% and 37% rates into a single 30% rate for those earning between $45,001 and $200,000.

For small business, the instant asset write-off will enable multiple assets of up to $20,000 to be written off in the year of purchase.

The Budget did not mention the loss carry-back rules for companies, the simplification of Division 7A, the Skills and Training Boost or the Technology Investment Boost. This suggests that the loss carry-back and temporary full expensing rules will expire on 30 June 2023, while the other measures remain in limbo.

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To discuss the Federal Budget and its potential impact on your individual circumstances or business, call PPT’s friendly team on 5331 3711.

DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.