By Tina Zawila
On 9th May 2023 Dr Jim Chalmers MP Treasurer delivered the Government’s second budget in this parliamentary term. Overall, the budget is predicted to be in surplus of $4.2billion (the first surplus since 2007-08), but it has an underlying cash deficit of $13.9billion.
Inflationary pressures, interest rates and escalating costs of living have all been front of mind for every-day Australians. So it’s not surprising that this year’s Budget had a strong emphasis on providing cost of living relief, Medicare and investing in our economy to build foundations for economic growth and to make us more resilient to international economic shocks.
But what does all that mean for you and me?
Firstly, the Government has predicted that the inflation rate has peaked and is starting to moderate, therefore, the Treasurer was quick to point out that the $14.6 billion in cost-of-living relief is “a helping hand designed not to add inflation pressure”. The key measures include:
· Direct Energy Bill Relief and a Household Energy Upgrade Fund
· Reducing out of pocket health costs with bulk billing incentives for GP Consultations and double dispensing quantities for 300 medicines
· Increases to Parenting Payment for single parents, JobSeeker, Austudy and Youth
· 15% increase in Commonwealth Rent Assistance rate to combat rising rent
· 15% increase to wages for many aged care workers
For small business (with turnover of less than $10 million), the current Temporary Full Expensing of Assets ceases on 30 June 2023, however the budget includes a temporary increase in the Instant Asset write-off threshold to $20,000 for the 2023/24 financial year.
Another announcement which will affect both employees and businesses is to require employers to pay compulsory super guarantee contributions every payday rather than quarterly from 1 July 2026. Whilst this is a while away, this is a significant change which will have an adverse impact on employers’ cashflow but will boost employee’s superannuation savings by the fact that smaller amounts will be invested earlier (in line with their weekly, fortnightly or monthly pay periods instead of once every quarter).
It is important to note that budget announcements are only announcements and are subject to the successful passage of relevant legislation before they can be relied upon.
As always, you should seek professional advice on your own individual circumstances to ensure that you are making the most of the Government’s support and tax incentives.
At UHY Haines Norton we are committed to keeping you up to date and informed.
If you would like further information on the Federal Budget, we invite you to attend our Annual Tax and Property Seminar next Wednesday, 24th May 2023 at 5.30pm. Call us on 4972 1300 to secure your spot.