2024 Australian Federal Budget Summary
2024 Australian Federal Budget Summary
On Tuesday 14th May, Treasurer Jim Chalmers delivered a budget surplus of $9.3 billion for the current fiscal year, marking the second budget surplus in as many years. While this is a reversal of a forecast deficit of $1.1 billion, the Government has forewarned that surpluses are likely to cease moving forward due to a combination of reduced economic output and necessary spending on existing measures and programs.
Cost-of-living relief remains a significant priority for the Government while managing the current inflationary environment, alongside significant investment in renewable energy as part of the Future Made in Australia program.
Summary
Personal Taxation
- Stage 3 personal tax rate changes amended for 2024-2025.
- Low-income tax offset (LITO)
- Medicare levy low-income thresholds increased for 2023-2024.
- HECS debt cap indexation reduced from 1 June
Superannuation
- Contribution caps increased for 2024-25.
- Super on paid parental leave applied for 2024-25.
Cost-of-Living Relief
- Energy bill relief for households from 1 July
- Price freeze for PBS prescription
- Social Security income deeming rates frozen to 30 June
- Payment increases for Rent Assistance & JobSeeker recipients from 20 September
- Relaxed eligibility for Carer Payment
Business Taxation
- Energy bill relief for small businesses from 1 July
- Small business instant asset write off extended to 30 June
- Further measures to support small businesses from 2024-25.
- BAS notification period for retention of refunds
Personal Taxation
Personal tax rates: (Revised) Stage 3 confirmed from 2024-25 onwards
The Government’s revised Stage 3 tax changes were announced on 25 January 2024, enacted into law by the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024 and commence from 1 July 2024.
Resident rates and thresholds:
| Taxable Income ($) | Tax Payable ($) |
| Up to $18,200 | Nil |
| $18,201 – $45,000 | Nil + 16% of excess over $18,200 |
| $45,001 – $135,000 | 4,288 + 30% of excess over $45,000 |
| $135,001 – $190,000 | 31,288 + 37% of excess over $135,000 |
| $190,000 + | 51,638 + 45% of excess over $190,000 |
The below table compares the current tax rates against the revised Stage 3 tax rates.
| Tax Rate | 2023-24 | 2024-25 |
| 0% | Up to $18,200 | Up to $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 + | $190,000 + |
Low-income tax offset (LITO): unchanged for 2024-25
Low and middle-income taxpayers remain entitled to the low-income tax offset (LITO). This is unchanged from the previous year.
| Taxable Income ($) | Amount of Offset |
| $0 – $37,500 | $700 |
| $37,501 – $45,000 | $700 – ({TI – $37,500} x 5%) |
| $45,001 – $66,667 | $325 – ({TI – $45,000} x 1.5%) |
| $66,668 + | Nil |
Medicare levy low-income thresholds: increased for 2023-2024 onwards
Alongside the revised Stage 3 tax changes, the Government announced an increase to the Medicare levy thresholds on 25 January 2024 and were applied retrospectively within the current financial year.
| 2022-23 | 2023-24 + | |
| Singles | $24,276 | $26,000 |
| Family | $40,939 | $43,846 |
| Seniors & Pensioners (Single) | $38,365 | $41,089 |
| Seniors & Pensioners (Family) | $53,406 | $57,198 |
| Dependent Child/Student | $3,760 | $4,027 |
HELP debts: cap indexation changes from 1 June 2023
Announced in the lead up to the Budget, the Government has capped the Higher Education Loan Program (HELP) indexation rate to the lower of the Consumer Price Index (CPI) and the Wage Price Index (WPI). This has been backdated to 1 June 2023, with changes as follows:
1) 2023: reduced from 7.1% to 3.2%.
2) 2024: reduced from 4.7% to ~4%.
Personal income tax compliance program
The Government will extend the ATO Personal Income Tax Compliance Program for one year from 1 July 2027, which will enable the ATO to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance, including overclaiming of deductions, incorrect reporting of income and inappropriate tax agent influence.
This allows the ATO to continue homing in on emerging risks to the tax system, such as deductions relating to short-term rental properties.
Superannuation
Contribution caps: increased from 1 July 2024
Superannuation contribution caps are to increase from 1 July 2025 in line with increase to average weekly ordinary time earnings (AWOTE):
| Contribution type | 2023-24 Cap | 2024-25 Cap |
| Concessional | $27,500 | $30,000 |
| Non-Concessional | $110,000 | $120,000 |
| Bring-Forward (Non-Concessional) | Up to $330,000 | Up to $360,000 |
Paying superannuation on Paid Parent Leave: confirmed from 1 July 2024
Announced in the lead up to the Budget, the Government will begin to pay superannuation on Commonwealth Government-funded Paid Parental Leave (PPL) for births and adoptions on or after 1 July 2025.
Parents who are eligible will receive an additional payment based on the superannuation guarantee. For 2024-25, this is expected to be 11.5% of PPL payments.
Additional funding to implement future superannuation changes
The Government will provide additional funding to support the delivery of various Government priorities in the Finance and Treasury portfolios. In relation to superannuation, this includes funding to assist with implementation of measures for:
- Members of the Commonwealth defined benefit superannuation
- Pursuing unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July
- Supporting workplaces with implementing superannuation changes such as payday superannuation.
Cost-of-Living Relief
Energy bill relief for households from 1 July 2024
The Government is providing $3.5 billion over three years (from 2023-2024) to provide cost-of-living relief, through a rebate of $300 on energy bills to all households to be applied in quarterly instalments.
Price freeze for PBS medication recipients
Co-payments for the Pharmaceutical Benefits Scheme will be frozen at $7.70 for five years for pensioners and concession card holders, and at $31.60 for two years for all other prescriptions.
Social Security deeming rates: frozen to 30 June 2025
The Government will look to extend the freeze on Social Security deeming rates for payments which are income tested for an additional 12 months, to 30 June 2025.
Deeming rates for financial investments, such as bank accounts, term deposits, shares and managed funds, are as follows:
| Deeming Rate | Single | Pensioner Couple |
| 0.25% | Up to $60,400 | Up to $100,200 |
| 2.25% | Amounts over $60,400 | Amounts over $100,200 |
Payment increases for Rent Assistance & JobSeeker: from 20 September 2024
To assist further with cost-of-living pressures, the Government has announced increases to the following Social Security measures from 20 September 2024:
- 10% increase in the maximum rate for Commonwealth Rent Assistance recipient
- Higher JobSeeker rate for recipients with partial capacity to work for up to 14 hours per week.
The Government will provide $1.9 billion over five years from 2024-2024, and $0.5 billion annually from 2028-2029, to increase the maximum Rent Assistance rate. A provision of $41 million will ensure that JobSeeker recipients who have partial capacity of work will receive a maximum of $816.90 per fortnight (for singles, up from $762.70).
Relaxed Eligibility for Carer Payment: from 20 March 2025
The Government will implement changes to the Carer Payment that provides increased flexibility for recipients as follows:
- Existing “participation limit” of 25 hours per week to be amended to 100 hours over four
- Limit to apply to employment, and not to study, volunteering activities and travel
Business Taxation
Energy bill relief for small businesses from 1 July 2024
In conjunction with relief for households, the Government will provide energy bill relief for eligible small businesses of $325, to be applied in quarterly instalments.
Small business instant asset write off: extended to 30 June 2025
Small businesses with annual turnover of less than $10m have been granted an extension of the small business instant asset write off scheme to 30 June 2025. The threshold of $20,000 applies on a per- asset basis, so small business can instantly write off multiple assets (there is no cap on the total amount that can be instantly written off).
Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.
Further measures to support small businesses from 2024-25 onwards
To further support small business, the Government will provide funding of $41.7 million over four years (from 2024-25) to support the following initiatives:
- Improving payment times to small
- Supporting the mental health of small business owners through the extension of the NewAccess for Small Business Owners
- Supporting the financial wellbeing of small business owners through the extension of the Small Business Debt
- Improving confidence in the franchising sector, by investing in the remake & improvement of the Franchising Code of Conduct to promote best practice
- Providing small business with better access to justice, through investment in the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) to expand service
BAS notification period for retention of refunds extended
To assist the ATO in combating fraud during peak fraud events, such as those which triggered Operation Protego, the Government will extend the time the ATO has to notify a taxpayer if it intends to retain a BAS refund for further investigation from 14 days to 30 days.
This aligns with time limits for non-BAS refunds, and legitimate refunds retained for over 14 days will continue to result in the ATO paying interest to the taxpayer.
If you would like to discuss further or have any questions, please contact the team on (03) 9670 6070 or [email protected].
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