2024/25 Federal Budget

The 2024/25 Federal Budget handed down this week contained a small number of tax, superannuation and small business measures.

Small Business Measures

Instant Asset Write-Off

The previously announced $20,000 instant asset write-off in last year’s budget (due to expire 30 June 2024) has been extended for another 12 months until 30 June 2025.

Small businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2025.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.

These measures still need to be passed into law, which is anticipated over the coming weeks.

Energy bill relief

In conjunction with the WA state budget, businesses will receive credits of $325 applied to their power bills.

It is anticipated these will be applied quarterly throughout the 12 months from 1 July 2024.

Future Made in Australia Plan

While a lot of detail and consultation is still required in relation to this announcement, this will include tax incentives for producers of renewable hydrogen and downstream refining and processing of Australia’s 31 critical minerals.

This measure is slated to operate from 2027-28 through to 2040-41.

Personal Tax Measures

Revised Stage 3 Tax Cuts

Permanent tax cuts confirmed from 1 July 2024 which are now law, under the previously announced revisions.

There have been no changes announced since earlier this year, and more information on the new rates can be found on the ATO’s website.

Medicare Levy Thresholds

Increases to the Medicare levy low-income threshold for singles, families and pensioners are in effect from 1 July 2023.

These thresholds will be reflected in the Medicare levy calculation for taxpayers in their upcoming 2024 tax return lodgement.

Other Measures

Energy bill relief

Households will receive credits of up to $300 which will be automatically applied to their power bills.

Cap Indexation on Student Loan Debt

This will limit the indexation applied to HELP debts (on 1 June each year) to the lower of CPI or the Wages Price Index (WPI).

The proposal will also be back-dated from the 2022-23 year, and given the difference in WPI and CPI being 3.9% lower in 2022-23, this will therefore create credits on those student loan accounts that had debt in that year.

The credits will offset against the current debt, rather than be refundable. However, it is expected that those students who have subsequently paid off their HELP or other debts based on the previous (higher) indexation, they will be eligible for a refund or credit to be applied against other Government or tax debts. This is yet to be confirmed.

Super on Paid Parental Leave

The budget confirmed the proposal to pay superannuation on Government-funded Paid Parental Leave for births and adoptions on, or after, 1 July 2025.

From that date onwards the super guarantee rate will be 12%, therefore meaning eligible parents will receive an additional 12% payment as a contribution by the Government to their superannuation fund.

If you have any questions concerning the budget measures, please contact our office.