GFM 2024 Federal Budget Highlights
17 May 2024
The 2024 Federal Budget was handed down on Tuesday 14 May.
Hello Clients, Friends and Family Members
Welcome to the annual Federal Budget Highlights update.
The 2024 Federal Budget provides cost of living relief through 1st of July 2024 tax cuts, lower power bills for both individuals and businesses, higher welfare payments and support for small business by extending the instant asset write off until the 30th of June 2025.
We hope you enjoy reading the highlights update. If you have any questions, please don’t hesitate to contact one of our team members.
Regards,
Darren, Brent and the team at GFM Accountants
Personal income tax measures
Stage three personal tax cuts
The Government has confirmed the revised stage three personal tax cuts that were announced prior to the Federal Budget being handed down and which have already been enacted into law.
The following tables outline the marginal income tax rates and thresholds that apply for resident individuals under the revised stage three personal tax cuts from 1 July 2024.
The tax rates and thresholds that apply for the 2024 income year are included for comparative purposes.
Australian resident individual income tax rates
| 2024 income year | From the 2025 income year | ||
| Tax rate | Thresholds | Tax rate | Thresholds |
| 0% | $0 – $18,200 | 0% | $0 – $18,200 |
| 19% | $18,201 – $45,000 | 16% | $18,201 – $45,000 |
| 32.5% | $45,001 – $120,000 | 30% | $45,001 – $135,000 |
| 37% | $120,001 – $180,000 | 37% | $135,001 – $190,000 |
| 45% | $180,001+ | 45% | $190,001+ |
Increased Medicare levy low-income thresholds
The Government has increased the Medicare levy low-income threshold amounts and phase-in ranges for singles, families and seniors and pensioners that apply from 1 July 2023.
The increased Medicare levy low-income threshold amounts and phase-in ranges were announced prior to the Federal Budget being handed down and have already been enacted into law.
The Medicare Levy low-income thresholds for individuals and families for the 2024 income year are as follows:
| Category of taxpayer | No Medicare Levy payable At or below: | Reduced Medicare levy Payable within: | Full Medicare Levy payable at or above: |
| Individual taxpayer | $26,000 | $26,001 – $32,500 | $32,501 |
| Individual taxpayer eligible for the SAPTO | $41,089 | $41,090 – $51,361 | $51,362 |
| Families eligible for the SAPTO | $57,198 | $57,199 – $71,497 | $71,498 |
| Families not eligible For the SAPTO with no Dependant child or student | $43,846 | $43,847 – $54,807 | $54,808 |
Small business measures
Temporary increase to the instant asset write-off
Under current law, the small business instant asset write-off threshold is (less than) $1,000 for the 2025 income year.
However, the Government has announced that it will temporarily set the instant asset write-off threshold for small business entities at (less than) $20,000 for the 2025 income year.
Small businesses with an aggregated annual turnover of less than $10 million will generally 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 by 30 June 2025. The asset threshold applies on a ‘per asset’ basis, so small businesses can instantly write off multiple assets.
Assets valued at $20,000 or more (i.e., 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.
From 1 July 2025, the instant asset write-off threshold will revert back to (less than) $1,000.
Relieving energy bill pressures
The Government is providing certain direct energy bill relief for small businesses. Of note, the Energy Bill Relief Fund is providing energy rebates to each of the approximately one million businesses on small customer electricity plans to help cover their electricity bills. This Budget will provide additional energy bill relief of $325 to eligible small businesses.
Superannuation
Superannuation on Paid Parental Leave
The Government has announced that it will pay superannuation on Commonwealth government-funded Paid Parental Leave for births and adoptions on or after 1 July 2025.
Eligible parents will receive an additional payment based on the Superannuation Guarantee (12% of their Paid Parental Leave payments), as a contribution to their superannuation fund.
Other budget measures
Freezing social security deeming rates
The Government will freeze social security deeming rates at their current levels for a further 12 months until 30 June 2025 to support age pensioners and other income support recipients who rely on income from deemed financial investments, as well as their payment, to manage cost of living pressures.
Tertiary education system reforms
The Government will provide funding to implement the first stage of reforms to Australia’s tertiary education system. Of note, this includes funding:
- to limit the indexation of the Higher Education Loan Program (and other student loans) debt to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023, subject to the passage of legislation; and
- to establish a new ‘Commonwealth Prac Payment’ of $319.50 per week (benchmarked to the single Austudy rate) from 1 July 2025 for tertiary students undertaking supervised mandatory placements as part of their nursing (including midwifery), teaching or social work studies. This will help alleviate the significant financial impact of mandatory placements and increase retention in courses for careers in sectors experiencing shortages.
Energy bill relief for households
The Government is providing direct energy bill relief for every Australian household. From 1 July 2024, all households will receive a total rebate of $300, which will be automatically applied to their electricity bills in quarterly instalments.
