Federal Budget 2024 and what it may mean for you
Below are some features of the Federal Budget that are particularly relevant to our clients – both individuals and businesses.
Note: Some features are pending a legislative change that must be passed through parliament. For all the detail directly from the Government, click here: www.budget.gov.au
Small Businesses
$20,000 Instant Tax Write-Off
The instant asset write-off scheme has been extended for another year, it allows small businesses with an annual turnover below $10m to claim a tax deduction on new equipment (such as a new ute, an oven, or a coffee machine) up to the value of $20,000.
Trades People:
The federal government has committed another $90 million to cover the education costs of 20,000 more people seeking to study programs related to housing and construction.
Payments up to $10,000 over the course of a person's study will also be on offer for people willing to learn clean energy skills under the revamped 'New Energy Apprentice Payment'.
Electricity Bills:
Eligible small businesses will receive a $325 rebate on their electricity bills.
To be eligible for the Energy Bill Relief payment, a small business must:
- be registered on a separately metered business tariff
- not exceed a total annual electricity consumption of 40MWh.
If a small business is run from home, the small business is not eligible for the small business bill relief unless the business’ energy consumption is separately metered (on a small business tariff). Other exclusions may also apply.
Small businesses in embedded networks are ineligible to receive a $325 Energy Bill Relief payment.
Individuals
Tax Cuts:
From July 1 every taxpayer will receive a tax cut following changes announced by the federal government earlier this year.
It means workers in every tax bracket will pay less income tax. You can use this calculator to find out exactly how big the tax cut will be for you.
https://www.abc.net.au/news/2024-01-25/stage-three-tax-cut-calculator/103387580
Student Debts Reduced:
People with HELP debts, VET student loans and Australian Apprenticeship Support Loans and other student loans will have their debts reduced as the federal government changes how the loans accrue interest.
Student debts will grow each year at the rate of either the consumer price index or the wage price index — whichever is lower.
This change will also be backdated to June last year, meaning loans for that year will grow at the lower wage index rate of 3.2 per cent instead of the 7.1 per cent inflation rate they were measured at.
Debt repayments won't change, but it means for someone with a $25,000 debt it will be $1,120 smaller than without the change.
Rent Assistance:
The maximum rate of money paid through the Commonwealth Rent Assistance payment will be increased by 10% from September this year.
The current maximum payment for a single person receiving rent assistance is $188.20 a fortnight, and $125.47 for a single person in a share house.
That means the payment would increase by about $19 a fortnight for a single person before accounting for indexation.
Parental Leave:
Superannuation will now be paid on top of Commonwealth-funded paid parental leave from July next year.
Superannuation has been raised as a key issue contributing to pay inequity between men and women, who typically access more parental leave, with the loss of the super payments during that time contributing to smaller savings on average at retirement.
The compulsory superannuation rate is currently 11%. It will increase by 0.5% on 1 July in 2024 and 2025 until it reaches 12%.
Electricity Bills:
Every Australian household will get a $300 rebate on their power bills, a partial extension of bill relief agreed in negotiations with states and territories last year.
From July, all households will have a $300 credit automatically applied to their electricity bills. $75 dollars will be credited per quarter.
Any questions?
Please reach out to the team at Mulcahy & Co if you have any questions about the contents of this article.
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