This is a pre-election budget for the people with everyone getting a little something to ease cost of living pressures. Like the Price is Right gameshow, it will all come down to the price paid at the checkout. If the consumer price index (CPI) returns to target by the end of 2024 off the back of the Budget initiatives as the Government anticipates, the Reserve Bank of Australia (RBA) may be inclined to reduce interest rates. However, at this stage, the RBA is not expecting inflation to return to the target range of 2-3% until the second half of 2025, and to the midpoint in 2026.

For business, the Government is picking winners through targeted public investment with its Future Made in Australia Framework that they are betting will pave the way for private investment in net zero transformation and the strengthening of Australia’s domestic economic resilience.

For small and medium business, there is a little but not a lot – an extension of the $20k instant asset write-off until 30 June 2025 and a $325 rebate to eligible businesses towards 2024-25 energy bills.

Individuals & Families

Personal income tax cuts confirmed

As previously announced, the Government has legislated permanent tax cuts for all Australian taxpayers from 1 July 2024.

Resident individuals tax rates

Tax rate	2023-24	2024-25
0%	$0 – $18,200	$0 – $18,200
16%		$18,201 – $45,000
19%	$18,201 – $45,000
30%		$45,001 – $135,000
32.5%	$45,001 – $120,000
37%	$120,001 – $180,000	$135,001 – $190,000
45%	>$180,000	>$190,000

 

Medicare levy low-income thresholds increase

The Medicare levy low-income thresholds will be increased for singles, families, and seniors and pensioners from 1 July 2023.

Medicare low-income threshold	Threshold as at 30 June 2023	Threshold from 1 July 2023
Singles	$24,276	$26,000
Families	$40,939	$43,846
Single – seniors and pensioners	$38,365	$41,089
Family – seniors and pensioners	$53,406	$57,198
Family – for each dependent child or student	$3,760	$4,027

The increases to the thresholds take account of recent movements in the CPI so that low-income taxpayers generally continue to be exempt from paying the Medicare levy.

 

$300 energy relief for households

Households will receive a credit of $300 on their energy bills credited as automatic quarterly instalments across 2024-25.

Energy relief will also be provided to eligible small businesses in the form of a $325 rebate.

Costing $3.5bn over three years from 2023-24, the measure extends and expands the Energy Bill Relief Fund.

 

Capping indexation of HELP debts

As previously announced, the Government will cap the HELP indexation rate to be the lower of either the CPI or the Wage Price Index (WPI) with effect from 1 June 2023. The change will apply to all HELP, VET Student Loans, Australian Apprenticeship Support Loans and other student support loan accounts that existed on 1 June 2023.

By changing the calculation of HELP indexation from 1 June 2023, the indexation rate is reduced from:

• 7.1% to 3.2% in 2023, and
• 4.7% to around 4% in 2024

The change resolves an issue for more than 3 million Australians with a HELP debt when the CPI indexation rate spiked to 7.1% last year.

An individual with an average HELP debt of $26,500 will see around $1,200 wiped from their outstanding HELP loans this year, pending the passage of legislation.

 

Superannuation on paid parental leave

As previously announced, from 1 July 2025 superannuation will be paid on Paid Parental Leave payments from 1 July 2025.

Eligible parents will receive an additional payment based on the superannuation guarantee (i.e. 12% of their PPL payments), as a contribution to their superannuation fund.

This payment is in addition to the changes that saw families provided with an extra two weeks of leave (22 weeks total), which will increase to 24 weeks from July 2025 and 26 weeks from July 2026.

 

Business & Employers

$325 energy relief for small business

Around one million small businesses will receive $325 off their energy bills over 2024–25. The support will apply as an automatic quarterly credit to energy bills.

Energy relief will also be provided to households in the form of a $300 rebate.

 

$20k Small business instant asset write-off extended

Small businesses, with an aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2025. This measure extends the 2023-24 Budget announcement to the 2024-25 financial year.

“Immediately deductible” means a tax deduction for the asset can be claimed in the same income year that the asset was purchased and used (or installed ready for use).

If the business is registered for GST, the cost of the asset needs to be less than $20,000 after subtracting the GST credits that can be claimed for the asset. If the business is not registered for GST, it is less than $20,000 including GST.

 

The write-off applies per asset, so a small business can deduct the cost of multiple assets.

The rules only apply to assets that fall within the scope of the depreciation provisions. Expenditure on capital improvements to buildings that falls within the scope of the capital works rules is not expected to qualify.

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 thereafter if the asset has been acquired by a small business entity that chooses to apply the simplified depreciation rules.

The provisions that prevent small businesses from re-entering the simplified depreciation regime for 5 years if they opt-out will continue to be suspended until 30 June 2025.

 

The increased small business instant asset write-off announced in the 2023-24 Federal Budget is not yet law.

 

Small business support services

The Government has announced $41.7 million in funding over four years from 2024–25 for a series of initiatives to support small businesses:

• Improving payment times to small businesses including naming and shaming
  • increased resourcing for the Payment Times Reporting Regulator so that it can deliver its expanded functions, which include naming slow paying businesses.
• Mental health and financial wellbeing of small business owners
  • Extending the NewAccess for Small Business Owners program, which provides tailored, free and confidential mental health support.
  • Extending the Small Business Debt Helpline.
• Franchising sector code changes – In response to the 2023 Schaper Review of the Franchising Code of Conduct, the Government is providing $3 million to:
  • Remake and improve the Code.
  • Promote best practice conduct between franchisors and franchisees.
  • Make it easier for small businesses to operate in the sector including through better access to dispute resolution.
• Access to justice
  • $2.6m in funding to the Australian Small Business and Family Enterprise Ombudsman. The ASBFEO assists and advocates for small businesses including helping to resolve disputes.