We have had a good look through the Federal Budget 2023 with you in mind. Below are the proposals we think are most likely to affect you or be of interest.
For You and Your Family
Relief for families and the cost of living dominated the Federal Budget. A number of new initiatives and changes were announced.
Support for cost of living
- Base allowance for income support payments, such as JobSeeker Payment, Austudy and Youth Allowance will be increased by $40 per fortnight.
- The minimum age for which people qualify for the higher JobSeeker Payment rate will be reduced to 55 years (currently 60 years old).
- Parenting Payment (Single) to support single principal carers has been expanded. Eligible parents will receive support until the youngest child is 14 years of age (currently 8 years old).
- Energy bill relief of up to $500 for low-income earning households and small business.
Medical and Medicare
- A tripling of bulk billing incentives for medical practitioners to bulk bill children under 16, pensioners and other Commonwealth card holders.
Business
The key themes for small business were asset renewal, environmental sustainability and increased engagement and compliance with the tax system.
Temporary Full Expensing
There is no extension to Temporary Full Expensing, which will end on 30 June 2023. This has been replaced by the $20,000 instant asset write-off.
$20,000 instant asset write-off
Small businesses (less than $10m turnover) will be eligible to instantly write off assets costing up to $20,000 per eligible asset. Eligible assets will need to be first used, or installed and ready for use, between 1 July 2023 and 30 June 2024.
Small business energy incentive
Eligible small and medium businesses (less than $50m turnover) who move away from gas and upgrade to energy efficient electric appliances between 1 July 2023 and 30 June 2024, may be rewarded with an additional 20% deduction on eligible assets up to a total of $100,000. Electric vehicles are excluded from this incentive.
Lodgement Penalty Amnesty
Small business (less than $10m turnover) are being encouraged to re-engage with the tax system with a temporary lodgement penalty amnesty program.The failure-to-lodge penalty will be removed from 1 June 2023 to 31 December 2023, for tax returns and activity statements that were originally due during the period from 1 December 2019 to 28 February 2022. No action is required for those lodging their returns, with any failure to lodge penalties being automatically remitted.
Superannuation
Extra Tax on Superannuation Account balances over $3m
From 1 July 2025 a 30% concessional tax rate will be applied to future earnings for superannuation balances above $3 million.
Payday and Super align
From 1 July 2026 employers will be required to pay superannuation to their employees at the same time as wages are paid. Currently, super contributions can be paid quarterly by an employer.
This start date will provide employers, super funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change. This measure is not yet law.
