Quick Federal Budget Summary for 2024-2025
The 2024-25 Federal Budget has a number of highlights relevant to many of our clients, friends, and supporters explored further below.
Here are some important things about taxes and retirement savings from the Budget that can help people and businesses plan their finances.
On May 9th, the Federal Budget was revealed as Australians will see a surplus for the first-time in 15 years. A surplus of $4.2 billion was announced for this financial year. However, this will be short-lived as they expect a deficit of $13.9 billion in 2023-24, and a $35.1 billion deficit in 2024-25.
Small Business Energy Incentive
Small businesses (turnover below $50 million) can get an extra 20% deduction on their expenses which supports electrification and more efficient use of energy. This applies to eligible assets or upgrades that are put into use or installed between July 1, 2023, and June 30, 2024.
Small Business instant asset write-off
Small businesses will have the option to instantly write off assets that cost less than $20,000 if they are used or installed and ready to be used between July 1,2023, and June 30, 2024. This means they can deduct the full cost of these assets immediately, rather than spreading it out over time.
Superannuation to be paid with wages
From July 1,2026, employers will need to pay superannuation on the same day as their employees’ payday instead of doing it at least quarterly. Although this change will give businesses and retirement funds three years to get ready for the new system, preparing for this change sooner rather than later will ensure a smooth transition.
PAYG and GST instalment uplift factor
For the 2023-24 financial year, the pay-as-you-go (PAYG) and Goods and Services Tax (GST) instalment GDP adjustment factor will be reduced to 6% from the previous 12%.
Non-arm’s length income (NALI)
Penalties for tax violations related to non-arm’s length expenses will still apply to self-managed superannuation funds and small APRA funds, but at a lower rate. However, large APRA funds are now completely exempt from these penalties.
ATO compliance program
Additional funds have been allocated to the Australian Taxation Office (ATO) to strengthen compliance efforts in various areas, including personal tax, GST, and tax debt collection. It is anticipated that this investment will generate approximately $9.1 billion over a span of five years.
More details can be found at the Governments's official Budget website here.
