Federal Budget 2023-24 measures already announced

The Treasurer, Dr Jim Chalmers, will hand down the Albanese Government’s Federal Budget 2023–24 tomorrow Tuesday 9 May 2023 at 7.30 pm. This article summarises the tax and superannuation Budget measures which the Government has confirmed ahead of Budget night.

Tax measures

The Small Business Energy Incentive

The Small Business Energy Incentive will provide businesses with annual turnover of less than $50 million a bonus 20 per cent deduction on expenditure that supports electrification and more efficient use of energy.

Eligible investments may include electrifying heating and cooling systems, upgrading to efficient fridges and induction cooktops, and installing batteries and heat pumps.

Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.

Eligible expenditure will be capped at $100,000, with the maximum bonus deduction being $20,000 per business.

Read the Treasurer’s media release.

Incentives to invest in build-to-rent accommodation

The Government will offer two tax incentives to increase the supply of rental housing by changing arrangements for investments in build-to-rent accommodation:

• the capital works deduction rate will increase from 2.5 per cent to 4 per cent per year for eligible new build-to-rent projects where construction commences after 9 May 2023
• the withholding tax rate for eligible fund payments from managed investment trusts to foreign residents on income from newly constructed residential build-to-rent properties after 1 July 2024 will be reduced from 30 per cent to 15 per cent.

Read the Minister for Housing’s media release.

Superannuation measures

Payday superannuation payments

From 1 July 2026, employers will be required to pay their employees’ superannuation guarantee (SG) at the same time as their salary and wages.

Read the Treasurer’s media release.

ATO resourcing to tackle SG non-compliance

The ATO will receive additional resourcing to help it detect unpaid SG payments earlier and the Government will set enhanced targets for the ATO for the recovery of payments.

The ATO estimates $3.4 billion worth of super went unpaid in 2019–20.

Read the Treasurer’s media release.

Additional tax on earnings on superannuation balances over $3 million

From 1 July 2025, earnings on an individual’s total superannuation balance exceeding $3 million will be taxed at a headline rate of 30 per cent (up from the current 15 per cent). The Government previously announced this measure and has released a consultation paper.

Read the TaxBanter Blog article Proposal to tax super fund earnings on balances over $3m — Consultation paper released

Other tax measures

Other tax measures which have been reported in the media include:

• changes to the petroleum resource rent tax (PRRT) to collect an extra $2.4 billion over four years by limiting the proportion of PRRT assessable income that can be offset by deductions to 90 per cent
• tax on tobacco to increase by 5 per cent per year over the next three years to raise an additional $3.3 billion over four years
• support for an OECD push for a minimum 15 per cent tax rate for multinationals and limiting debt-related deductions.

The Government has confirmed that it will not extend the low and middle income tax offset beyond 2021–22.

Other measures

Other economic measures which have been announced include:

• an additional $2 billion funding for the National Housing Finance and Investment Corporation to support more social and affordable rental housing
• an expansion of the three categories of the Home Guarantee Scheme from 1 July 2023 — including that friends, siblings and other family members will be eligible for joint applications, and Australian Permanent Residents and people who have not owned a property in Australia in the last 10 years will become eligible
• an additional $3.7 billion for a five-year National Skills Agreement with the states and territories from 1 January 2024, and $400 million for another 300,000 TAFE and VET Fee-Free places, to address Australia’s acute skill shortage
• the age cut-off for the single parenting payment to be lifted from eight to 14 from 20 September 2023
• a $14.6 billion cost of living relief package, including $1.5 billion in electricity bill relief — of up to $500 — for more than five million households and one million small businesses
• a package of support to roll out electrification to businesses and households, including helping low income households and renters switch from gas to electricity
• a Sovereign Green Bonds Program to enable investors to back public projects to drive Australia’s net zero transformation
• an additional $4.3 million next year for ASIC to continue its focus on greenwashing
• a further $48.3 million to fight fraud against the NDIS
• a funding boost of almost $10 million to increase financial assistance to young carers aged 12-25 so they can continue their education while taking on caring responsibilities
• an indication that there will be an increase in the daily jobseeker rate.

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