Making Cents Of The 2023-24 Budget!

Another year, another budget announcement that sometimes confuses, perplexes or straight up befuddles with the information, but that’s why we’re here!

Let’s debunk and make cents (ha ha ha good pun marketing guy) of the budget stuff announced by Treasurer Jim Chalmers on Tuesday night that may relate to you!  

Alright, settle in. She’s a bit of a doozy.  

SOME QUICK HITS  

• Cost of living relief. HUGE ONE! The Government has said this as the number one priority in this budget and has put forward $14.6 billion dollars to go towards it. Think electricity bills, which will see some savings of $500 for households and up to $650 ($325 in VIC) for small business (depending on eligibility).  

• The budget also is projecting that the Commonwealth will record a surplus for the 2023 financial year (unreal scenes), so if that does come to fruition it will be the first surplus recorded in 15 years. Cue the office episode about the Surplus....new chairs, or a new copier?  
• Tax stuff. There are a few important things in this bad boy, which we’ll get into below which concern private businesses and their owners.  

TAX BREAKS FOR SMALL BIZ  

Alrighty, there’s a few changes here. The Government will improve cash flow for small businesses by temporarily increasing the instant asset write-off threshold to $20,000 for businesses with an aggregated annual turnover of less than $10 million. However, as you may know from previous years budgets, this is actually a reduction compared to previous financial year’s Temporary Full Expensing rules which had an unlimited cap for small businesses, and the higher instant asset right off thresholds we had before that.

Regardless, the new instant asset write-off threshold will be available for assets used or installed between July 1, 2023 and June 30, 2024, so the start of the next financial year.  

An amnesty has also come into play for small businesses with a turnover of $10 million or less and who have fallen behind on the old tax returns.  

If your tax return was due between December 1, 2019 and February 28, 2022 and you haven’t yet lodged said tax return, the ATO will not issue a fine to you...but there is a catch. You must lodge the returns between 1 June 2023 and 31 December 2023 to be eligible. So, you’ve got 7 months to sort that one and avoid some fines if you need to catch up. Remember to reach out if you need a hand!  

TAX CRACKDOWN (OH BOY!)  

The main implication for small business is:

The ATO will continue to (as they have for the last year or two) chase outstanding BASs and GST debt. They will also continue to dedicate resources to making sure people that should be registered for GST, are registered for GST.

TAX INCENTIVE FOR ENERGY EFFICIENCY YOU SAY?  

There’s a little incentive here for small to medium-sized businesses. A bonus 20% tax deduction can be claimed on spending (up to a total spend of $100,000) on purchases that support more efficient energy use. Think of more efficient appliances like fridges, batteries and electric heating and cooling! For most small businesses, this translates to a tidy 5% discount on your purchase after the tax-deduction is applied.¹

CHILDCARE  

The government’s childcare subsidy changes totalling $4.7 billion will come into play from July 1.  For families earning less than $80k, childcare for their first child is taking a climb and will sit at 90%, and for those who go over $80k, it gets lower based on the income you have. Overall, families could see a jump in the subsidy by 20%, which will be a welcome saving in these higher interest rate times.  

SUPER STUFF  

The government has confirmed what we already knew. From July 2026 employers will have to pay super at payday, rather than quarterly. A subtle change, but it looks like it may make a difference down the road for employees’ super accounts.  

The other super change is another one we heard about back in February. A change to the tax rate for those with super accounts over $3 million dollars. This means that from the 2025 financial year, any future earnings on balances over $3 million will be taxed at 30%, double the rate it is currently.  

OTHER STUFF FOR SMALL BUSINESS  

A few other “watch this space” announcements for support small businesses:  

• Reducing the increase in quarterly GST and tax instalments from 12% to 6%.  
• $23.4 million Investment in Cyber Security

• $392.4 million Investment in an Industry Growth Program  
• $18.1 million Investment in Buy Australia Plan

These types of investments tend to filter down through state government grants so keep an eye out.  

THINGS MISSING FROM THE BUDGET:  

• The old Stage 3 tax cuts we keep hearing about. They’ll come in July 1, 2024 in which income between $45,000 and $200,000 will be taxed at a flat 30% rate.  

• The low- and middle-income tax offset. It’s gone! This expired on June 30, 2022.  

So, there you have it. The budget is stacked, so here’s a few things we’ve picked out to focus on. If you want a more in-depth read into the entire budget, you can download it HERE.