Now is the time to start planning and reviewing your records to maximise your tax deductions for the 2024/2025 financial year.
1. Pay Quarterly Super early
Super Guarantee (SG) contributions must be paid before 30 June to qualify for a tax deduction in the 2024/2025 financial year. Consider bringing forward your June quarter SG payments to increase the benefit.
2. Write-off bad debts
Review your debtor list to identify those who owe you money but are unlikely to pay. Write-off bad debts before 30 June - the debt must not be merely doubtful and must have been previously included as assessable income.
3. Prepaid Expenses
Small business entities may bring forward deductible expenses such as rent, repairs and office supplies, that cover a period of no more than 12 months.
4. Stock Take
Trading stock should be reviewed before 30 June to identify any obsolete, slow moving or damaged stock. Obsolete stock must be physically disposed of for income purposes to receive a deduction.
5. Take advantage of the instant asset write off
On 14 May 2024, as part of the 2024–25 Budget, the government announced it will continue to provide support for small businesses by extending the $20,000 instant asset write-off limit for a further 12 months until 30 June 2025.
Please note that this measure has not been passed through Parliament, and is not yet law.
6. Review and postpone some of your invoicing for the current tax year, if appropriate.
7. Contribute to your Super
Top up your voluntary superannuation contributions. You can contribute up to $30,000 in deductible super contributions each year.
If you have a super balance of less than $500,000 at the 30th June then consider using the carry forward rules to claim a deduction for any unused super contribution caps from previous years.
8. Capital Gains Tax Planning
Strategically time the sale of assets to manage CGT liabilities by holding assets for more than a year to qualify for a 50 percent CGT discount.
9. Negatively Geared Rental Properties
You may be eligible to claim a deduction for expenses such as interest, insurance, and rates that you prepay for up to 12 months in advance.
10. Undertake strategic tax planning with your accountant
Great accountants look at two types of tax planning: short-term and long-term tax planning. Short-term planning looks at what you can do before 30 June to minimise your tax this financial year. Long-term tax planning looks at how you can utilise your business structure and the type of investments you can make to minimise tax over the long term. Consider whether restructuring your business into a trust or company could improve tax efficiency.
The Government’s big moment in the 2025-26 Federal Budget was the personal income tax cuts. Income tax cuts are a dazzling headline but in reality they deliver a tax saving of up to $268 in the 2026-27 year, with a tax saving of up to $536 from the 2027-28 year.
At the same time, the Australian Taxation Office has been allocated almost $1bn in funding to extend and enhance its compliance programs.
Two previously announced measures of note that have not passed Parliament but remain in the Budget are:
Both of these measures have stalled in Parliament and, assuming they are not approved in the final days of Parliament, will lapse when an election is called.
Budget 2025-26 is a budget for voter appeal with over $7bn in additional spending measures in 2025-26 and over $20bn across five years. Most measures extend previously announced and Budgeted items for another year. Key initiatives include:
Energy
Healthcare
Education
Housing
Families
Lifestyle
Economically, trade tensions have magnified global uncertainty. Global growth is already subdued. The indirect effect of tariffs is estimated to be nearly four times as large as the direct effect on Australia, reflecting the relative importance of affected trade flows between Australia, China, and the United States.
Australia’s economy is expected to grow, albeit slowly at 2.25% in 2025-26 and 2.5% in 2026-27.
The Budget will be in deficit at -$42.1bn in 2025-26, before improving marginally but remaining in the red.
| From | 1 July 2026 |
The Government will provide a “modest” tax cut to all taxpayers from 1 July 2026 and again from 1 July 2027.
The tax rate for the $18,201-$45,000 tax bracket will reduce from its current rate of 16%, to 15% from 1 July 2026, then to 14% from 2027-28 at a cost of $648m over four years.
The saving from the tax cut represents a maximum of $268 in the 2026-27 year and $536 from the 2027-28 year.
| From | 1 July 2024 |
The Medicare levy low-income threshold exempts low-income earners from having to pay the levy. From 1 July 2024, the threshold for the exemption will increase.
The change will mean low-income earners will pay less when they lodge their income tax returns for 2024-25.
| 2024-25 | 2025-26 | |
| Singles | $26,000 | $27,222 |
| Families | $43,846 | $45,907 |
| Single seniors & pensioners | $41,089 | $43,020 |
| Family seniors & pensioners | $57,198 | $59,886 |
| Family additional child or student | $4,216 | $4,027 |
The threshold changes come at a cost of $648m over 5 years.
Proposed personal income tax threshold
| Thresholds ($) | Rates in 2024–25 and 2025–26 (%) | Rates in 2026–27 (%) | Rates in 2027–28 (%) |
| 0 – 18,200 | Tax free | Tax free | Tax free |
| 18,201 – 45,000 | 16 | 15 | 14 |
| 45,001 – 135,000 | 30 | 30 | 30 |
| 135,001 – 190,000 | 37 | 37 | 37 |
| >190,000 | 45 | 45 | 45 |
| From | 1 July 2025 |
Households and small business will receive an additional automatic credit of $150 on their energy bills in quarterly instalments between 1 July 2025 and 31 December 2025.
The extension of energy bill rebates will cost $1.8 billion over two years.
From 1 July 2025, the way in which foreign residents interact with the tax system were scheduled to come into effect. These changes have now been delayed.
The start date for proposed amendments to the capital gains tax (CGT) rules for foreign residents has been delayed until 1 October 2025 at the earliest, and potentially later depending on the passage of the reforms through Parliament.
The changes would broaden the range of assets subject to CGT for foreign residents when they dispose of them, amend the rules which determine whether the sale of shares in a company or units in a trust are subject to CGT and require foreign residents to disclose transactions involving shares or trust interests with a value of at least $20 million to the ATO before they occur.
From 1 April 2025, the Government has banned foreign and temporary residents, and foreign-owned companies, from purchasing established dwellings to prevent ‘land banking’. The ban applies for 2 years but is subject to some limited exceptions.
The extension of the cleaning building management investment trust (MIT) withholding tax concession was due to commence from 1 July 2025. This has now been delayed until the first 1 January, 1 April, 1 July or 1 October after the Act receives Royal Assent.
The Government will also amend the tax laws to clarify arrangements for MITs to ensure that legitimate investors can continue to access concessional withholding rates. The changes will apply to find payments from 13 March 2025 and will complement the ATO’s increased focus in this area to prevent misuse – see Taxpayer Alert 2025/1.
The Government’s ‘Help to Buy’ program reduces the deposit required to buy a home by providing an equity contribution. Under the program, Housing Australia provides eligible participants with a Commonwealth equity contribution of up to 30% of the purchase price of an existing home and up to 40% of the purchase price of a new home. That is, they will give you the money and take a stake in your home.
Originally, to be eligible for the program, the income threshold for a single was $90,000 and, for joint participants, $120,000. The Budget increases this threshold to $100,000 and $160,000 respectively. Additional conditions apply.
The program is not currently available to applicants.
| Date | From 2027 |
The Government has announced that it will ban non-compete clauses for low and middle-income employees (under the Fair Work Act high income threshold is currently $175,000). Non‑compete clauses are conditions in employment contracts that prevent or restrict an employee from moving to a competitor. Back in April 2024, Treasury released an issues paper for consultation on Worker non-compete clauses and other restraints. The review stated that, “The direct consequence of a non-compete clause is that it hinders competition among businesses: it disincentivises workers from leaving their current job, creating a barrier to the entry of new businesses and the expansion of existing businesses.”
The Government is also make changes to competition law to prevent businesses from:
| Date | August 2025 (beer excise) 1 July 2026 (other measures) |
Indexation on the draught beer excise and excise equivalent customs duty rates will be paused for two years from August 2025. This just means that the price of beer won’t go up because of tax.
Support is also provided under the Excise remission scheme for manufacturers of alcoholic beverages increasing caps for all eligible brewers, distillers and wine producers to $400,000 per financial year, from 1 July 2026 (up from $350,000).
The Government has extended additional 35% trade tariffs imposed on goods that are the produce or manufacture of Russia or Belarus. The measure is symbolic support for Ukraine as it delivers a negligible increase in revenue over five years.
| Date | From 1 July 2025 |
The Government has set aside $999m over 4 years for the ATO to expand its compliance programs:
The compliance programs are expected to deliver a threefold return of $3.2bn.
The Government intends to further pair back its use of consultants, contractors and labour hire. The budget estimates that the Government will save $718m in 2028-29 by continuing cuts to external labour.
Growth
Australia’s economy is expected to grow, albeit slowly, at 2.25% in 2025-26 and 2.5% in 2026-27.
The direct impact of Ex-Tropical Cyclone Alfred on economic activity is estimated to be up to 0.25% of GDP.
We’re back in a deficit
The underlying cash balance will be a deficit at -$42.1bn in 2025-26, before improving but remaining in the red for several years.
Debt is also higher, rising from 18.4% of GDP in 2023-24 to an estimated 21.5% in 2025-26, rising to 23.1% by 2028-29.
Employment
The unemployment rate has stayed low, the participation rate remains elevated, and employment has grown by more than one million people since May 2022 with around 80% of jobs created in the private sector since the June quarter 2022.
Unemployment is expected to peak at 4.25%.
Wages
Annual real wages have grown for five consecutive quarters and are forecast to grow by 0.5% in 2024-25.
The Wage Price Index (WPI) grew by 3.2% through the year to the December quarter 2024 and is expected to grow by 3% through the year to the June quarter of 2025 and 3.25% to June 2026.
Inflation
Inflation is expected to be 2.5% through the year to the June quarter 2025.
The moderation of inflation was helped by cost of living relief and a decline in petrol prices towards the end of 2024. Electricity rebates and indexation of rent assistance (Commonwealth and State) reduced headline inflation by 0.75% through the year to the December quarter of 2024.
Global tensions
Economically, trade tensions have magnified global uncertainty. Global growth is already subdued. The indirect effect of tariffs is estimated to be nearly four times as large as the direct effect on Australia, reflecting the relative importance of affected trade flows between Australia, China, and the United States. Retaliatory tariffs, if they occur, will only amplify losses in real GDP.
Beyond the difficult task of dividing up your assets and determining who should get what, it’s essential to look at the tax consequences of how your assets will flow through to your beneficiaries.
When assets pass from a deceased individual to a beneficiary of the estate, the tax impact will generally depend on the nature of the asset and the tax characteristics of the beneficiary, such as their residency status.
When cash passes from a deceased individual to their estate and then to a beneficiary, generally, there should not be any direct tax issues to deal with, assuming that the cash is denominated in AUD.
Death is a taxing event. When a change of ownership of an asset occurs, generally, a capital gains tax event (CGT) is triggered. However, the tax rules provide some relief from CGT when someone dies. The basic rule is that a capital gain or loss triggered by a death is disregarded unless the asset is transferred to one of the following:
The exemption applies if the asset passes to the deceased’s legal personal representative (i.e., executor) or to a beneficiary of the estate, which is not one of the entities listed above.
Once the asset has been transferred to the beneficiary, the beneficiary will need to manage the tax impact when they sell the asset.
Let’s assume you inherit an ASX listed share portfolio under your mother’s will. The tax outcome will depend on whether your mother was an Australian resident for tax purposes when she died, and whether the shares were acquired by your mother before or after 20 September 1985 (i.e., pre-CGT or post-CGT).
If your mother was an Australian resident for tax purposes when she died, and the shares were acquired post-CGT, then the cost base of the shares is normally based on the original purchase price. That is, the tax rules treat the inherited shares as if you purchased them. For example, if your mother purchased BHP shares for $17.82 on 2 January 1997, when you sell the shares, the gain is calculated based on your mother’s purchase price of $17.82.
If your mother was a resident of Australia when she died, and the shares were acquired pre-CGT, then the cost base of the shares is normally reset to their market value at the date of death. That is, if your mother passed away on 1 October 2024, the share price at close was $45.96. If you subsequently sold the shares in three years, the gain or loss is calculated using this value.
If your mother was a non-resident when she died, then the cost base of the shares is normally based on their market value at the date of death.
But it’s not all about the tax. Managing shares in your will can be difficult as prices and allocations change over time, and the companies you are invested in evolve. A portfolio that was once worth a small amount 20 years ago, might be worth significantly more when you die.
Let’s assume you inherit an Australian residential property from your father under his will. For certain tax purposes, you are taken to have acquired the property at the date of his death.
The general rule is that the executor and/or beneficiaries of the estate inherit the cost base and reduced cost base of the CGT assets (the house) owned by the deceased just before their death, but this isn’t always the case, especially when it comes to pre-CGT properties and a property that was the main residence of the deceased individual just before they died.
Special rules exist that enable some beneficiaries or estates to access a full or partial main residence exemption on the inherited property. If the house was your father’s main residence before he died, he did not use the home to produce income (did not rent it out or use it as a place of business) and he was a resident of Australia for tax purposes, then a full CGT exemption might be available to the executor or beneficiary if either (or both) of the following conditions are met:
For example, if the house was your father’s main residence and was eligible for the full main residence exemption when he died, if you sell the house within the 2 year period, no CGT will apply. However, if you sell the house 10 years later, the CGT impact will depend on how the property has been used since the date of your father’s death.
An extension to the two year period can apply in limited certain circumstances, for example when the will is contested or is complex.
If your father did not live in the property just before he died, it still might be possible to apply the full exemption if your father chose to continue treating the home as his main residence under the ‘absence rule’. For example, if he was living in a retirement village for a few years but maintained the property as his main residence for CGT purposes (even if it was rented out).
If your father was not an Australian resident for tax purposes when he died, the cost base for CGT purposes will normally be based on the purchase price paid by your father if he acquired it post-CGT.
If you are an Australian resident who has inherited a foreign property or asset from an individual who was a non-resident just before they died, the cost base is normally taken to be the market value at the time of death. For example, if you inherited a house from your uncle in the UK, the cost base is likely to be the value of the house at the date of his death.
If a taxable gain arises on sale, then it is necessary to consider whether the CGT discount can apply, but the discount will sometimes be less than 50%. If the gain is also taxed overseas, then a tax offset can sometimes apply to reduce the amount of tax payable in Australia.
Managing an inheritance can become complex. For assistance with estate planning, or to understand the tax implications of an inheritance, please contact us.
The main residence exemption exempts your family home from capital gains tax (CGT) when you dispose of it. But, like all things involving tax, it’s never that simple.
As the character of Darryl Kerrigan in The Castle said, “it’s not a house. It’s a home,” and the Australian Taxation Office’s (ATO) interpretation of a main residence is not fundamentally different. A home is generally considered to be your main residence if:
The length of time you have lived in the home is important, but there are no hard and fast rules. Your intention takes precedence over time spent as every situation is different.
In general, CGT applies to the sale of your home unless you have an exemption, partial exemption, or you can offset the tax against a capital loss.
If you are an Australian resident for tax purposes, you can access the full main residence exemption when you sell your home if:
If you have used your home to produce income, you won’t normally be able to claim the full main residence exemption, but you might be able to claim a partial exemption.
Common scenarios impacting your main residence exemption include:
In these scenarios, from the time you started to use the home to generate income, that part of the home is likely to be subject to CGT. And, a word of caution here, as of 1 July 2023, platforms such as Airbnb must report all transactions to the ATO every 6 months. This data will be used to match against the income reported on income tax returns.
Foreign residents cannot access the main residence exemption even if they were a resident for part of the time they owned the property.
If you are a non-resident at the time you enter into the contract to sell the property, you are unlikely to be able to access the main residence exemption. Conversely, if you are a resident at the time of the sale, and you meet the other eligibility criteria, the rules should apply as normal even if you were a non-resident for some of the ownership period. For example, an expat who maintains their main residence in Australia could return to Australia, become a resident for tax purposes again, then sell the property and if eligible, access the main residence exemption.
It’s important to recognise that the residency test is your tax residency, not your visa status. Australia’s tax residency rules can be complex. If you are uncertain, please contact us and we will work through the rules with you.
You might have heard about the ‘absence rule’. This rule allows you to continue to treat your home as your main residence for tax purposes:
When you apply the absence rule to your home, this normally prevents you from applying the main residence exemption to any other property you own over the same period. Apart from limited exceptions, the other property is exposed to CGT.
Let’s say you moved overseas in 2020 and rented out your home while you were away. Then, you came back to Australia in 2023 and moved back into your house. Then in early 2024, you decided it is not your forever home and sold it. You elected to apply the absence rule to your home and didn’t treat any other property as your main residence during that same period. In this case, you should be able to access the full main residence exemption assuming you are a resident for tax purposes at the time of sale.
The 6 year period also resets if you re-establish the property as your main residence again, but later stop living there. So, if the time the home was income producing is limited to six years for each absence, it is likely the full main residence exemption will be available if the other eligibility criteria are met.
Your home normally qualifies as your main residence from the point you move in and start living there. However, if you move in as soon as practicable after the settlement date of the contract, that home is considered your main residence from the time you acquired it.
If you buy a new home but haven’t yet sold your old home, you can treat both properties as your main residence for up to six months without impacting your eligibility to the main residence exemption. This applies if the old home was your main residence for a continuous period of 3 months in the 12 months before you disposed of it and you did not use your old home to produce income in any part of that 12 months when it was not your main residence.
If the sale takes more than six months and if eligible, the main residence exemption could apply to both homes only for the last six months prior to selling the old home. For any period before this it might be possible to choose which home is treated as your main residence (the other becomes subject to CGT).
If your new home is being rented to someone else when you purchase it and you cannot move in, the home is not your main residence until you move in.
If you cannot move in for some unforeseen reason, for example you end up in hospital or are posted overseas for a few months for work, then you still might be able to access the main residence exemption from the time you acquired the home if you move in as soon as practicable once the issue has been resolved. Inconvenience is not a valid reason and you will need to ensure that you have documentation to support your position.
Let’s say you and your spouse each own homes that you have separately established as your main residences.
The rules don’t allow you to claim the full CGT exemption on both homes. Instead, you can:
If you and your spouse nominate different dwellings, the exemption is split between you:
The same rule applies to your spouse.
The rule applies to each home that the spouses own regardless of how the homes are held legally, i.e., sole ownership, tenants in common or joint tenants.
Assuming the home is transferred to one of the spouses (and not to or from a trust or company), both individuals used the home solely as their main residence over their ownership period, and the other eligibility conditions are met, then a full main residence exemption should be available when the property is eventually sold.
If the home qualified for the main residence exemption for only part of the ownership period for either individual, then a partial exemption might be available. That is, the spouse receiving the property may need to pay CGT on the gain on their share of the property received as part of the property settlement when they eventually sell the property.
The main residence exemption looks simple enough but it can become complex quickly.
The instant asset write-off threshold increased from $1,000 to $20,000 for 2023-24.
The increase to the instant asset write-off threshold provides a major cashflow advantage by enabling small businesses to claim an immediate tax deduction for certain assets in the year of purchase, instead of spreading the deduction over a number of years.
Remember that the deduction is not a refund, it will only reduce the taxable income of the business entity, or in some cases, it will create or increase a tax loss that needs to be carried forward to future years. For example, if your business operates through a company structure, the economic benefit of the write-off is limited to the relevant company tax rate (25% for base rate entities, 30% for other companies). If your business is likely to make a tax loss for the year, then a larger deduction might not provide any short-term benefit.
Eligibility to access the instant asset write-off looks at both your business entity and the asset.
To utilise the instant asset write-off, your business entity must:
And, for an asset to be eligible, it must:
The provisions that prevent small business entities from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended until 30 June 2024 (the lock-out rules).
If your business is a small business entity and chooses to apply the simplified depreciation rules, then assets costing $20,000 or more (that cannot be immediately deducted) can continue to be placed into the small business general pool and depreciated at 15% in the first income year and 30% each income year thereafter.
The increased instant asset write-off threshold also means that a $20,000 threshold applies for the purpose of determining whether the full pool balance is written off in the 2024 income year. Just remember that when you are applying these rules, you don’t look at the closing pool balance, you are looking at what the pool balance would have been if you ignored the current year depreciation deductions for the pool for the 2024 year.
The write-off threshold applies per asset, so a small business entity can potentially deduct the full cost of multiple assets. Assuming all the other conditions are met, an immediate deduction should be available for each individual item costing less than $20,000 - just be careful of cashflow.
The instant asset write-off does not distinguish between new or second-hand goods. For example, second hand machinery may qualify if it meets the other requirements.
In the 2024-25 Federal Budget, the Government announced an extension to the increased instant asset write-off threshold to 30 June 2025. A Bill is currently before Parliament to enact this change.
The end of the financial year is fast approaching. We outline the areas at risk of increased ATO scrutiny and the opportunities to maximise your deductions.
Take advantage of the 1 July 2024 tax cuts by bringing forward your deductible expenses into 2023-24. Prepay your deductible expenses where possible, make any deductible superannuation contributions, and plan any philanthropic gifts to utilise the higher tax rate.
If growing your superannuation is a strategy you are pursuing, and your total superannuation balance allows it, you could make a one-off deductible contribution to your superannuation if you have not used your $27,500 cap. This cap includes superannuation guarantee paid by your employer, amounts you have salary sacrificed into super, and any amounts you have contributed personally that will be claimed as a tax deduction.
And, if your superannuation balance on 30 June 2023 was below $500,000 you might be able to access any unused concessional cap amounts from the last five years in 2023-24 as a personal contribution. For example, if you were $8,000 under the cap in each of the last 5 years, you could contribute an additional $40,000 and take the tax deduction in this financial year at the higher personal tax rate.
To make a deductible contribution to your superannuation, you need to be aged under 75, lodge a notice of intent to claim a deduction in the approved form (check with your superannuation fund), and get an acknowledgement from your fund before you lodge your tax return. For those aged between 67 and 75, you can only make a personal contribution to super if you meet the work test (i.e., work at least 40 hours during a consecutive 30-day period in the income year, although some special exemptions might apply).
And, if your spouse’s assessable income is less than $37,000 and you both meet the eligibility criteria, you could contribute to their superannuation and claim a $540 tax offset.
If you are likely to face a tax bill this year, for example, you made a capital gain on shares or property you sold, then making a larger personal superannuation contribution might help to offset the tax you owe.
When you donate money (or sometimes property) to a registered deductible gift recipient (DGR), you can claim amounts over $2 as a tax deduction. The more tax you pay, the more valuable the tax deductible donation is to you. For example, a $10,000 donation to a DGR can create a $3,250 deduction for someone earning up to $120,000 but $4,500 to someone earning $180,000 or more (excluding Medicare levy).
To be deductible, the donation must be a gift and not in exchange for something. Special rules apply for amounts relating to charity auctions and fundraising events run by a DGR.
Philanthropic giving can be undertaken in a number of different ways. Rather than providing gifts to a specific charity, it might be worth exploring the option of giving to a public ancillary fund or setting up a private ancillary fund. Donations made to these funds can often qualify for an immediate deduction, with the fund then investing and managing the money over time. The fund generally needs to distribute a certain portion of its net assets to DGRs each year.
If you do not have one already, a depreciation schedule is a report that helps you calculate deductions for the natural wear and tear over time on your investment property. Depending on your property, it might help to maximise your deductions.
Working from home is a normal part of life for many workers, and while you can’t claim the cost of your morning coffee, biscuits or toilet paper (seriously, people have tried), you can claim certain additional expenses you incur. But, work from home expenses are an area of ATO scrutiny.
There are two methods of claiming your work from home expenses; the short-cut method, and the actual method.
The short-cut method allows you to claim a fixed 67c rate for every hour you work from home. This covers your energy expenses (electricity and gas), internet expenses, mobile and home phone expenses, and stationery and computer consumables such as ink and paper. To use this method, it’s essential that you keep a record of the actual days and times you work from home because the ATO has stated that they will not accept estimates.
The alternative is to claim the actual expenses you have incurred on top of your normal running costs for working from home. You will need copies of your expenses, and your diary for at least 4 continuous weeks that represents your typical work pattern.
If you own an investment property, a key concept to understand is that you can only claim a deduction for expenses you incurred in the course of earning income. That is, the property needs to be rented or genuinely available for rent to claim the expenses.
Sounds obvious but taxpayers claiming investment property expenses when the property was being used by family or friends, taken off the market for some reason or listed for an unreasonable rental rate, is a major focus for the ATO, particularly if your property is in a holiday hotspot.
There are a series of issues the ATO is actively pursuing this tax season. These include:
It’s essential that any income (including money, appearance fees, and ‘gifts’) earned from platforms such as Airbnb, Stayz, Uber, OnlyFans, youtube, etc., is declared in your tax return.
The tax rules consider that you have earned the income “as soon as it is applied or dealt with in any way on your behalf or as you direct”. If you are a content creator for example, this is when your account is credited, not when you direct the money to be paid to your personal or business account. Squirrelling it away from the ATO in your platform account won’t protect you from paying tax on it.
Since 1 July 2023, the platforms delivering ride-sourcing, taxi travel, and short-term accommodation (under 90 days), have been required to report transactions made through their platform to the ATO under the sharing economy reporting regime. This is the first year that the ATO will have the income tax returns of taxpayers to match to this data.
All other sharing economy platforms will be required to start reporting from 1 July 2024. If you have income you have not declared, do it now before the ATO discover it and apply penalties and interest.
There are a series of bonus deductions available to small business in 2023-24, these include the instant asset write-off, energy incentive, and the skills and training boost.
Announced in the 2023-24 Federal Budget, the increase to the instant asset write-off threshold enables small businesses with an aggregated turnover of less than $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000. In the 2024-25 Federal Budget, the Government extended this measure to 30 June 2025.
Without these measures, the instant asset write-off threshold would be $1,000.
However, legislation to enact the 2023-24 measure has not passed Parliament following a disagreement between the House of Representatives and the Senate about the amount of the threshold, and whether the measure should apply to medium businesses as well (up to $50m).
Similarly, the $20,000 energy incentive that provides an additional 20% deduction on the cost of eligible depreciating assets or improvements to existing depreciating assets that support electrification and more efficient use of energy in 2023-24, is not yet law.
Assuming both measures pass Parliament by 30 June 2024, any assets need to be first used or installed ready for use, or the improvement costs incurred, between 1 July 2023 and 30 June 2024 to be written off in 2023-24.
What is certain is the bonus 20% deduction for eligible expenditure for external training provided to your employees. The ‘skills and training boost’ is available to businesses with an aggregated annual turnover of less than $50 million. To claim the boost, the training needs to have been provided by a registered training provider and registered and paid for between 29 March 2022 and 30 June 2024. Typically, this is vocational training to learn a trade or courses that count towards a qualification rather than professional development.
Your customer definitely not going to pay you? If all attempts have failed, the debt can be written off by 30 June. Ensure you document the bad debt on your debtor’s ledger or with a minute.
If your business has obsolete plant and equipment sitting on your depreciation schedule, instead of depreciating a small amount each year, scrap it and write it off before 30 June.
If it makes sense to do so, bring forward tax deductions by committing to directors’ fees and employee bonuses (by resolution), and paying June quarter super contributions in June.
Failing to lodge returns is a huge ‘red flag’ for the ATO that something is wrong in the business. Not lodging a tax return will not stop the debt escalating because the ATO has the power to simply issue an assessment of what they think your business owes. If your business is having trouble meeting its tax or reporting obligations, we can assist by working with the ATO on your behalf.
For professional services firms – architects, lawyers, accountants, etc., - the ATO is actively reviewing how profits flow through to the professionals involved, looking to see whether structures are in place to divert income to reduce the tax they would be expected to pay. Where professionals are not appropriately rewarded for the services they provide to the business, or they receive a reward which is substantially less than the value of those services, the ATO is likely to take action.
Here’s a summary of the key changes coming into effect on 1 July 2024:
The Treasurer is promising that inflation will decline by 0.75% as a direct result of the 2024-25 Federal Budget initiatives including energy relief for all households, a boost to Commonwealth Rent Assistance, and the freezing of the maximum co-payment on the Pharmaceutical Benefits Scheme.
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.
The 2023-24 surplus has increased to $9.3bn but is expected to decline to a deficit of $28.3bn in 2024-25, driven primarily by the Stage 3 tax cuts.
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.
For foreign residents, the capital gains tax (CGT) regime will be amended to broaden the type of assets subject to CGT and introduce a modified 365-day principal asset testing period.
Key measures:
• Previously announced Stage 3 tax cuts
• $300 energy bill relief for all Australian households and $325 for eligible small businesses - applied as an automatic quarterly credit.
• Student HELP debts will be cut by changing the way indexation is calculated. From 1 June 2023, it will be the lower of the CPI or the Wage Price Index (WPI), reducing the debt accumulated by more than 3 million Australians when the CPI spiked to 7.1%.
• Increase to the Commonwealth rent assistance maximum rates by 10% from 20 September 2024.
• One year freeze on the maximum Pharmaceutical Benefits Scheme (PBS) patient co-payment for Medicare card holders and a five-year freeze for pensioners and other concession cardholders.
Those with large superannuation balances will be disappointed that the 30% tax on super earnings on balances above $3 million remains in place, this is set to commence from 1 July 2025.
| From | 1 July 2024 |
As previously announced, the Government has legislated permanent tax cuts for all Australian taxpayers from 1 July 2024.
Relative to the previous Stage 3 plan, the redesigned cuts broaden the benefits of the tax cut by focussing on individuals with taxable income below $150,000.
| From | 1 July 2023 |
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 studen | $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.
| From | 1 July 2024 |
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.
| From | Loan accounts that existed on 1 June 2023 |
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:
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.
Estimated indexation for HELP debts
| HELP debt at 30 June 2023 | Total estimated credit for 2023 and 2024* |
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and are subject to indexation on 1 June 2024 will receive an indexation credit.
| From | 1 July 2025 |
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 (see Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, Royal Assent 20 March 2024).
| From | 20 September 2024 |
The Commonwealth rent assistance maximum rates will increase by 10% from 20 September 2024.
Recipients of Centrelink/Department of Veterans Affairs payments and those receiving family tax benefit may also receive rent assistance if they are paying rent or other rent like payments over a minimum fortnightly threshold.
The current maximum fortnightly rates are $188.20 for a single person and $177.20 combined for a couple.
The measure will cost $1.9 billion over five years from 2023–24 (and $0.5 billion per year ongoing from 2028–29), and builds on the 15% increase in September 2023, taking the maximum rates over 40% higher than in May 2022.
The Government will provide funding of $2.2 billion over the next five years to deliver key aged care reforms and to continue to implement recommendations from the Royal Commission into Aged Care Quality and Safety.
This funding includes the release of an additional 24,100 home care packages in 2024-25.
The Government has also agreed to defer the commencement date of the new Aged Care Act to 1 July 2025.
The Government is currently in the middle of considering and implementing changes to the way aged care is funded on the back of the Royal Commission into Aged Care Quality and Safety report released in 2021.
This will likely impact home care and residential care fees in the future. Generally, with past reform we have seen existing residents and home care recipients ‘grandfathered’ under the rules at the time they entered.
| Date | 20 March 2025 |
Currently, to receive the Centrelink Carer Payment, the care giver is required to not be involved in work, study or training for more than 25 hours per week. This is to reflect the requirement that to receive this payment the care giver should be providing the care recipient with ‘constant care’.
From 20 March 2025, the existing 25 hours per week will be amended to 100 hours over four weeks.
This limit will no longer capture study, volunteering and travel time so will only apply to employment.
In addition:
| Date | 20 September 2024 |
The Government will extend eligibility for the existing higher rate of JobSeeker payment to single recipients with a partial capacity to work (zero to 14 hours per week) from 20 September 2024.
Currently, those on JobSeeker payments aged 55 or over and who have been on the payment for nine continuous months receive a higher rate of payment. These are:
| Relationship status | Maximum payment per fortnight |
| Single with no children | $762.70 |
| Single with dependent children | $816.90 |
| Single 55 or older after 9 continuous months of payments | $816.90 |
| Partnered (Each) | $698.30 |
| Date | 12 months until 30 June 2025 |
When calculating Centrelink and Department of Veterans affairs payments, rather than assessing the actual income from financial investments, a deemed rate of return based on the total value of these investments is assumed. Some common examples of financial investments include bank accounts, term deposits, shares and managed funds.
The Government proposes to freeze the deeming rates (shown below) until 1 July 2025:
| 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 |
| From | 1 January 2024 |
The Government will ensure that the cost of medicines remains low by freezing indexation:
The $1 optional discount available on patient co-payments for subsidised prescriptions will be reduced each year by the relevant notional indexation amount until the $1 discount has been reduced from $1 to zero.
From 1 January 2024, you may pay up to $31.60 for most PBS medicines, or $7.70 if you have a concession card. The Australian Government pays the remaining cost (with the exception of brand premiums and certain other allowable charges).
Housing initiatives address three key areas:
As previously announced, much of the Budget funding however flows to the States and Territories to increase housing stock, increase social housing, and provide crisis accommodation. New measures include:
| Date | From mid-2025 |
As previously announced, the Government has committed almost $1bn over 5 years to permanently establish the Leaving Violence Program – so those escaping violence can receive financial support, safety assessments and referrals to support pathways. Those eligible will be able to access up to $5,000 in financial support along with referral services, risk assessments and safety planning.
| Date | CGT events commencing on or after 1 July 2025 |
The foreign resident capital gains tax (CGT) regime will be expanded by:
Under current law, foreign residents are subject to CGT when they sell an asset that is classified as ‘taxable Australian property’ (TAP). The rules seek to ensure that non-residents are subject to Australian CGT on the disposal of assets that have a sufficient with Australian land and assets that have been used in business activities in Australia..
Shares in a company and units in a trust can be classified as TAP if the taxpayer and certain related parties hold at least a 10% interest in the entity and where more than 50% of the gross market value of the assets held by the entity is attributable to real property located in Australia and similar assets.
The measure is intended to ensure that Australia can tax foreign residents on direct and indirect sales of assets with a close economic connection to Australian land, bringing the treatment more in line with the tax treatment that already applies to Australian residents.
The new ATO notification process will improve oversight and compliance with the foreign resident CGT withholding rules, where a vendor self-assesses the sale doesn’t involve TAP.
The proposed reforms will also align Australia’s tax law for foreign resident capital gains more closely with OECD standards and international best practice.
The Government will consult on the implementation details of the measure, which is estimated to increase receipts by $600 million and increase payments by $8 million over the five years from 2023–24.
| Date | 1 July 2024 |
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.
Costing $3.5bn over three years from 2023-24, the measure extends and expands the Energy Bill Relief Fund.
| Date | 1 July 2023 to 30 June 2025 |
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, see Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023). Senate amendments proposed increasing the threshold from $20,000 to $30,000 and expanding the measure to apply to medium entities.
The Government has announced a bold initiative to make Australia a “renewable energy superpower.”
The $22.7 billon series of initiatives is designed to foster and encourage significant private sector investment into priority industries necessary to harnessing the economic and industrial benefits of the move to net zero and securing Australia’s place in a changing global economic and strategic landscape.
The Future Made in Australia Act will establish the policy framework - the focus will be on industries in which Australia has a genuine economic advantage, where it contributes to an orderly path to net zero, where it builds on the capabilities of the people and regions and improves Australia’s national security and economic resilience.
| Date | From 2027–28 to 2040–41 |
As part of the Future Made in Australia initiative, the Government will provide an estimated $19.7 billion over ten years from 2024–25 to accelerate investment in Future Made in Australia priority industries including renewable hydrogen, green metals, low carbon liquid fuels, refining and processing of critical minerals and manufacturing of clean energy technologies including in solar and battery supply chains.
This includes two time‑limited tax incentives to invest in new industries:
The tax incentives are proposed to be in effect from the 2027–28 to the 2040–41 income years.
Funding measures
The Government is getting into business with industry to encourage investment in select areas:
| Date | 2025-26 income year |
The Producer Tax Offset is a refundable tax offset for Australian expenditure in making Australian films when certain conditions are met. The amount of the offset is:
The minimum duration requirement differs depending on the format of the production.
As part of the Government’s announced National Cultural Policy, it will make the changes to the Producer Tax Offset from 2025–26 to remove:
| Date | Over four years from 2024–25 |
The Government has announced $41.7 million in funding over four years from 2024–25 for a series of initiatives to support small businesses:
| Date | From 2024–25 |
$7.5 million over four years from 2024–25 (and $1.5 million per year ongoing) has been provided to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology.
The Government will:
The current charity transitional reporting arrangement will be extended for five years.
The Government will remake the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Regulation 2016 with an extension of the current charity transitional reporting arrangement for five years.
The purpose of the regulation is to reduce the regulatory reporting burden on certain not-for-profit entities (registered entities) under the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act) by providing that the ACNC Commissioner may treat a statement, report or other document given under an Australian law to an Australian Government agency by a registered entity as satisfying certain reporting obligations under the ACNC Act.
| Date | First income year after Royal Assent of enabling legislation |
The Government announced that it will provide $187 million over four years from 1 July 2024 to the ATO to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems.
Funding includes:
The Government will also strengthen the ATO’s ability to combat fraud by extending the time the ATO has to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation. The ATO’s mandatory notification period for BAS refund retention will be increased from 14 days to 30 days to align with time limits for non-BAS refunds.
The extended period will strengthen the ATO’s ability to combat fraud during peak fraud events like the one that triggered Operation Protego. Legitimate refunds will be largely unaffected. Any legitimate refunds retained for over 14 days would result in the ATO paying interest to the taxpayer - as is currently the case. The ATO will publish BAS processing times online.
This measure is estimated to increase receipts by $302.2 million and increase payments by $187.4 million over the five years from 2023–24.
Specific funding has been provided to the ATO for key targets. These include:
Personal income tax - The ATO’s Personal Income Tax Compliance Program will be extended for one year from 1 July 2027. This measure is estimated to increase receipts by $180.3 million and increase payments by $44.3 million over the 5 years from 2023–24.
The shadow economy - the ATO’s Shadow Economy Compliance Program will be extended for two years from 1 July 2026. This measure is estimated to increase receipts by $1.9 billion and increase payments by $610.2 million over the 5 years from 2023–24. This includes an increase in GST payments to the states and territories of $429.6 million.
Anti-avoidance taskforce - extend the ATO’s Tax Avoidance Taskforce for two years from 1 July 2026. This measure is estimated to increase receipts by $2.4 billion and increase payments by $1.2 billion over the 5 years from 2023–24.
The Tax Avoidance Taskforce has a strong focus on the top 1,100 public and multinational businesses and the top 500 privately owned groups, but also covers all 5,000 high wealth private groups that control net wealth exceeding $50 million and public and multinational businesses outside of the ATO’s justified trust programs.
As of 30 June 2023, the taskforce has assisted the ATO raise $32.7 billion in tax liabilities.
Child care providers - $4.8 million over four years from 2024–25 to ensure satisfactory engagement with the Australian tax system regarding fitness and propriety requirements of existing and new child care providers (relating to the Child Care Subsidy Program).
Identify checking - $155.6 million over two years from 2024–25 to continue operating and improving the Government’s Digital ID, myGovID, and the system which supports authorised access to a range of government business services.
Migrant workers - $1.9 million in 2024–25 for a data-matching pilot between the Department of Home Affairs and the ATO of income and employment data to mitigate exploitation of migrant workers and abuse of Australia’s labour market and migration system.
E-invoicing - $23.3 million over four years from 2024–25 to continue to oversee and operate the secure eInvoicing network as part of the Government’s work to combat scams and online fraud through the introduction of mandatory industry codes to be established under a Scams Code Framework and increased use of the secure eInvoicing network.
Military invalidity payments - The Government will provide $11.9 million over five years from
2023–24 (and $0.9 million per year ongoing) to implement a social security means test treatment for the military invalidity payments affected by the Federal Court’s decision in FCT v Douglas [2020] FCAFC 220. This approach ensures the Douglas decision does not affect income support payment rates for veterans who receive an invalidity payment from the Military Superannuation and Benefits Scheme and the Defence Force Retirement and Death Benefits Scheme, compared to the pre-Douglas arrangements.
In Douglas, the Full Federal Court found that invalidity pensions paid under the Military Superannuation Benefits and Defence Force Retirement and Death Benefits schemes that commenced after 20 September 2007 were ‘superannuation lump sum payments’ rather than ‘superannuation income stream benefits’ within the meaning of the ITAA 1997.
| Date | 1 July 2024 |
From 1 July 2024, the Government will decrease the overall levy rate on sweet potatoes from 1.5% to 0.5%.
| Date | Royal assent of amending legislation |
The 2023-24 Budget measure to extend Part IVA, scheduled to commence on 1 July 2024, has been delayed so that this applies to income years starting on or after the date the amending legislation receives Royal Assent.
Part IVA contains the general anti-avoidance provision that the ATO can use to attack arrangements that are entered into in order to obtain tax benefits.
Under the measure, the scope of Part IVA will be extended so that it can apply to:
The start dates for the following components of the Streamlining excise administration for fuel and alcohol package, will be changed.
Australian plantation forestry entities will be exempt from the new thin capitalisation earnings-based rule.
The 2022–23 October Budget measure Multinational Tax Integrity Package amended the thin capitalisation rules to replace the safe harbour and worldwide gearing tests with earnings-based tests to limit debt deductions in line with an entity’s profits.
Instead, Australian plantation forestry entities will be allowed to continue to apply the former asset-based thin capitalisation rules.
Australian business number - The previous Government’s 2019–20 Budget measure Black Economy — strengthening the Australian Business Number system had proposed start dates of 1 July 2021 and 1 July 2022. This measure will not progress.
Intangibles in low tax jurisdictions - The measure, Denying deductions for payments relating to intangibles held in low- or no-tax jurisdictions – announced in the 2022–23 October Budget will not proceed. The integrity issues will be addressed through the Global Minimum Tax and Domestic Minimum Tax being implemented by the Government. The Government will also introduce a new provision from 1 July 2026 that applies a penalty to taxpayers who are part of a group with more than $1 billion in global turnover annually that are found to have mischaracterised or undervalued royalty payments, to which royalty withholding tax would otherwise apply.
| Date | Debts ‘on hold’ prior to 1 January 2017 |
The Government will amend the tax law to give the Commissioner of Taxation the discretion not to use a taxpayer’s refund to offset old tax debts, but only for debts put ‘on hold’ prior to 1 January 2017. This discretion will apply to individuals, small businesses and not-for-profits, and will maintain the Commissioner’s current administrative approach.
In 2023, the Australian National Audit Office advised the ATO that excluding debt from being offset was inconsistent with the law, regardless of when the debt arose. This amendment resolves an issue for the ATO for older debts but enforces current practice for all debts from 1 January 2017.
| Date | From 1 July 2024 |
The Government has announced that it will recalibrate the Fair Entitlements Guarantee Recovery Program to pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024.
The Fair Entitlements Guarantee Recovery Program aims to improve the recovery of employment entitlements advanced under the Fair Entitlements Guarantee (FEG). The FEG is a legislative safety net scheme of last resort with assistance available for eligible employees.
| Date | Four years from 2024–25 |
$60 million has been provided over four years from 2024–25 to increase the Productivity, Education and Training Fund to support practical activities by employer and worker representatives to boost workplace productivity and engage in tripartite cooperation. This will also support workplaces to implement policy changes such as the introduction of payday superannuation.
| Date | Four years from 2024–25 |
The Government will provide $168 million over four years from 2024–25 to implement reforms to strengthen Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
The Attorney-General’s Department held a first round of consultation on proposed reforms to modernise Australia’s anti-money laundering and counter-terrorism financing regime between April and June 2023, following the release of its first consultation paper. The Department received 142 submissions in response, which were broadly in support of reform, including:
Funding includes:
Greenwashing - ASIC has been provided with $10m over 4 years and $1.9 million ongoing to investigate and take enforcement action against market participants engaging in greenwashing and other sustainability-related financial misconduct.
Green bonds - $5.3 million over 4 years from 2024-25 and $1.2 million ongoing has been provided to Treasury and APRA to deliver the sustainable finance framework, including issuing green bonds, improving data and engaging in the development of international regulatory regimes related to sustainable finance.
Labelling regime - $1.2 million has been provided to ASIC and Treasury to consult on the design of a labelling regime to regulate the use of sustainability labels on retail investment products.
This year, the Government launched Australia’s first national strategy with an explicit focus on achieving gender equality. Working for Women: A Strategy for Gender Equality (Working for Women) is the Government’s ten-year commitment to ‘shift the dial’ on gender equality.
The Women’s Budget Statement is now a reporting mechanism for Working for Women. From this Budget onward, the Women’s Budget Statement will report on the Government’s investments to implement Working for Women.
The 2024–25 Women’s Budget Statement focuses on five priorities, which mirror the priority areas of Working for Women:
The Government has announced measures as part of the Federal Budget to:
$39.9 million over five years from 2023–24 will be provided for the development of policies and capability to support the adoption and use of artificial intelligence (AI) technology in a safe and responsible manner, including:
The Digital Transformation Agency will also develop and implement policies to
position government as an exemplar in the use of AI, with costs to be met from within
existing resources.
$466.4 million has been provided for a financing package of equity and loans provided by Export Finance Australia on the National Interest Account to PsiQuantum Pty Ltd to support the
construction and operation of quantum computing capabilities and associated
investment in industry and research development in Brisbane, as part of a joint
investment with the Queensland Government. Additional funding of $27.7 million over
11 years from 2023–24 will also be provided for the Department of Finance, the
Department of Foreign Affairs and Trade, the Department of Industry, Science and
Resources and the Department of the Treasury to manage and provide oversight of this
investment. The financial implications of the financing package are not for publication
(nfp) due to commercial sensitivities
Previously announced tax and superannuation policy decisions that are still before Parliament include:
| Policy | Detail |
| Instant asset write-off | Proposal to increase the instant asset write-off threshold from $1,000 to $20,000 for the 2024 income year. Senate amendments proposed increasing the threshold from $20,000 to $30,000 and expanding the measure to apply to medium entities. |
| Small business energy incentive39 | Proposes to provide small and medium businesses with access to a bonus deduction equal to 20% of the cost of eligible assets or improvements to existing assets that support electrification or more efficient energy use. |
| Petroleum resource rent tax (PRRT) deductions cap | Proposes amendments to effectively cap the availability of deductible expenditure incurred by a person in relation to a petroleum project for a year of tax. |
| Federal Administrative Review Body | Abolish the Administrative Appeals Tribunal (AAT) and establish the Administrative Review Tribunal (the Tribunal). |
| Strengthen the integrity of the tax system40 | Proposed reforms to strengthen the integrity of the tax system, increasing the power of regulators and strengthening regulatory arrangements. |
| Better targeted superannuation concessions | Proposes amendments to reduce the tax concessions available to individuals with Total Super Balances exceeding $3 million. |
| Non-arm’s length expenditure for superannuation entities39 | Proposes amendments to the non-arm’s length expense rules for complying superannuation entities, that will restrict the operation and application of the rules. |
| Objective of superannuation | Proposes to legislate the objective of superannuation. |
Policy decisions that are in the consultation phase include:
The Government announced it would not proceed with the Modernising Business Registers Program.
Key statistics
The first four years of this decade have tested the economy and the resilience of all Australians: floods and bushfires, a once-in-a-century global pandemic, followed by the most significant international energy crisis in 50 years. The combined impact of these events resulted in economic consequences on supply chains, energy prices, inflation and interest rates. These events may seem like distant memories but they continue to impact the economy.
Australia is continuing to face ongoing global uncertainty stemming from persistent inflation in North America; growth slowing in China and other major economies; the United Kingdom and Japan both finishing the year in recession; and tensions rising in the Middle East and Eastern Europe.1
Inflation and cash rate
Inflation is moderating but still high compared to the target range of 2 to 3% required by monetary policy.
Michelle Marquardt, ABS head of prices statistics:
“Annually, the CPI rose 3.6 per cent to the March 2024 quarter. While prices continued to rise for most goods and services, annual CPI inflation was down from 4.1 per cent last quarter and has fallen from the peak of 7.8 per cent in December 2022.”
Inflation has increased the cost of living, as Australian households are paying more to purchase the same goods and services.
The surplus in 2022–23 took some pressure off inflation, allowing the Government to fund their priorities and reduce debt interest. All encouraging signs, but the Government acknowledges it still needs to reduce inflation further and faster. The budget measures seek to ease inflation and not add to it.
The cash rate is currently at 4.35%, the RBA last raised the cash rate on 7 November 2023 by 0.25% to return inflation to the target range in a reasonable timeframe. The price of goods is moderating but services remain inflated. Overall, higher interest rates have led people to cut back on spending. This is slowing economic growth and bringing demand into better balance with supply.
Resident individuals
| 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 |
Non-resident individuals
| Tax rate | 2023-24 | 2024-25 |
| 30% | $0 – $135,000 | |
| 32.5% | $0 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Working holiday markers
| Tax rate | 2023-24 | 2024-25 |
| 15% | 0 – $45,000 | 0 – $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 |
| Budget measure | Application date |
| Individuals | |
| Tax cuts have been legislated for all 13.6 million Australian taxpayers | 2024–25 and later income years |
| Increasing the Medicare levy low income thresholds | From 1 July 2023 |
| Indexation on HELP debt to be capped to the lower of either the CPI or the WPI. | 1 June 2023 |
| Business | |
| Instant asset write-off threshold temporarily increased to $20,000. | From 1 July 2024 until 30 June 2025 |
| Two time‑limited tax incentives to invest in new industries: Critical Minerals Production Tax Incentive to support downstream refining and processing of Australia’s 31 critical minerals to improve supply chain resilienceHydrogen Production Tax Incentive to producers of renewable hydrogen to support the growth of a competitive hydrogen industry. | 2027–28 to the 2040–41 income years |
| Extension and expansion of the Energy Bill Relief Fund | Funding for three years from 1 July 2024 |
| All households will have $300 credit automatically applied to their electricity bills and around one million small businesses will receive $325 off their bills over 2024–25. | From 1 July 2024 |
| Funding to support small business by: Improving payment times to small businessesSupporting mental health and financial wellbeing of small business ownersEnsuring confidence in the franchising sectorProviding small business with better access to justice | Funding for four years from 2024–25 |
| Proposed changes to the Producer Tax Offset to remove: The minimum length requirements for contentThe above-the-line cap of 20% of total qualifying production expenditure. | 2025–26 income year |
| Tax exempt entities | |
| Extension of transitional reporting for charities and updates to specifically listed DGRs | Various |
| International | |
| Strengthen the foreign resident CGT regime by: Clarifying and broadening the types of assets on which foreign residents are subject to CGTAmending the point-in-time principal asset test to a 365-day testing periodRequiring foreign residents disposing of shares and other membership interests exceeding $20 million in value to notify the ATO, prior to the transaction being executed. | CGT events commencing on or after 1 July 2025 |
| Superannuation | |
| The Government will pay superannuation on Commonwealth government-funded PPL | Births and adoptions on or after 1 July 2025 |
| Funding to support the progression of the Government’s workplace relations agenda, including: Pursuing unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024Supporting workplaces to implement policy changes such as the introduction of payday superannuation. | Funding for four years from 2024–25 |
| Funding to support the delivery of Government priorities in the Finance and Treasury portfolio including: Implement the 2023–24 Budget measure Better Targeted Superannuation Concessions for members of the Commonwealth defined benefit superannuation schemesSuperStream Gateway Network Governance Body | Funding over four years from 2024-25 |
| Compliance | |
| Extend the Tax Avoidance Taskforce | Funding over two years from 1 July 2026 |
| Extend the Personal Income Tax Compliance Program | Funding for one year from 1 July 2027 |
| Extend the Shadow Economy Compliance Program | Funding over two years from 1 July 2026 |
| ATO funding to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems | Funding over four years from 1 July 2024 |
| Funding for the ATO for various matters including: Requirements of existing and new child care providers (relating to the Child Care Subsidy Program)Improving the Government’s Digital ID, myGovID and other systemsData-matching pilot between the Department of Home Affairs and the ATOOverseeing / operating the secure eInvoicing network | Various |
| Other measures | |
| Funding to strengthen Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, to enhance Australia’s ability to detect and disrupt illicit financing. | Funding over four years from 2024–25 |
| Women’s Budget Statement — various measures that focus on four priorities | Various |
| Funding to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology. | Funding over four years from 2024–25 |
| Funding to implement a social security means test treatment for the military invalidity payments affected by the Federal Court’s decision in FCT v Douglas [2020] FCAFC 220. | Funding over five years from 2023–24 |
| Funding to deliver key aged care reforms and to continue to implement recommendations from the Royal Commission into Aged Care Quality and Safety. | Funding over five years 2023–24 |
| New Aged Care Act — deferred commencement date | 1 July 2025 |
| Social security deeming rates will freeze at their current levels | Until 30 June 2025 |
| Increased flexibility for recipients of Carer Payment —the existing 25 hour per week participation limit will be amended to 100 hours over four weeks. | From 20 March 2025 |
| Commonwealth Rent Assistance maximum rates to be increased by 10% | 20 September 2024 |
| Eligibility for the existing higher rate of JobSeeker payments has been extended | 20 September 2024 |
| General | |
| Amendments to previously announced measures: Australian plantation forestry entities are exempt from the new earnings-based test, thin capitalisation rulesGiving the Commissioner a discretion not to use a taxpayer’s refund to offset old tax debts - where the old tax debt was put on hold before 1 January 2017 Extending income tax exemption to World Rugby and/or related entities in relation to income from Rugby World Cup events for the 2023–24 to 2030–31 income years (incl.) | |
| Deferring the start date for Tax Integrity — expanding the general anti-avoidance rule in the income tax law | Income years starting on or after the day the amending legislation receives Royal Assent |
| Changing the start dates for certain components of the Streamlining excise administration for fuel and alcohol package | The day after Royal Assent |
| Measures not proceeding: Denying deductions for payments relating to intangibles held in low- or no-tax jurisdictions measure — announced in the 2022–23 October. Previous Government’s 2019 –20 Budget measure Black Economy – strengthening the Australian Business Number system. |
Now is the time to start planning and reviewing your records to maximise your tax deductions for the 2023/2024 financial year.
1. Pay Quarterly Super early
Super Guarantee (SG) contributions must be paid before 30 June to qualify for a tax deduction in the 2023/2024 financial year. Consider bringing forward your June quarter SG payments to increase the benefit.
2. Write-off bad debts
Review your debtor list to identify those who owe you money but are unlikely to pay. Write-off bad debts before 30 June - the debt must not be merely doubtful and must have been previously included as assessable income.
3. Prepaid Expenses
Small business entities may bring forward deductible expenses such as rent, repairs and office supplies, that cover a period of no more than 12 months.
4. Stocktake
Trading stock should be reviewed before 30 June to identify any obsolete, slow moving or damaged stock. Obsolete stock must be physically disposed of for income purposes to receive a deduction.
5. Take advantage of the instant asset write off
In the 2023/2024 budget released on the 9th of May 2023, the government temporarily increased the instant asset write off threshold to $20,000. This means that a small business, turnover less than $10 million, will be able to immediately deduct the full purchase value of assets less than $20,000
6. Review and postpone some of your invoicing for the current tax year, if appropriate.
7. Contribute to your Super
Top up your voluntary superannuation contributions. You can contribute up to $27,500 in deductible super contributions each year.
If you have a super balance of less than $500,000 at the 30th June then consider using the carry forward rules to claim a deduction for any unused super contribution caps from previous years.
8. Undertake strategic tax planning with your accountant
Great accountants look at two types of tax planning: short-term and long-term tax planning. Short-term planning looks at what you can do before 30 June to minimise your tax this financial year. Long-term tax planning looks at how you can utilise your business structure and the type of investments you can make to minimise tax over the long term
From 1 July 2024, the amount you can contribute to super will increase. We show you how to take advantage of the change.
The amount you can contribute to superannuation will increase on 1 July 2024 from $27,500 to $30,000 for concessional super contributions and from $110,000 to $120,000 for non-concessional contributions.
The contribution caps are indexed to wages growth based on the prior year December quarter’s average weekly ordinary times earnings (AWOTE). Growth in wages was large enough to trigger the first increase in the contribution caps in 3 years.
Other areas impacted by indexation include:
For those with the disposable income to contribute, superannuation can be very attractive with a 15% tax rate on concessional super contributions and potentially tax-free withdrawals when you retire. For business owners who might have had an exceptional year or sold their business, it's an opportunity to get more into super. However, the timing of contributions will be important to maximise outcomes.
If you know you will have a capital gains tax liability in a particular year, you may be able to use ‘catch up’ contributions to make a larger than usual contribution and use the tax deduction to help offset your capital gain tax bill. But, this strategy will only work if you meet the eligibility criteria to make catch up contributions and you lodge a Notice of intent to claim or vary a deduction for personal super contributions, with your super fund.
The bring forward rule enables you to bring forward up to 2 years’ worth of future non-concessional contributions into the year you make the contribution – this is assuming your total superannuation balance enables you to make the contribution and you are under age 75.
If you utilise the bring forward rule before 30 June, the maximum that can be contributed is $330,000. However, if you wait to trigger the bring forward until on or after 1 July, then the maximum that can be contributed under this rule is $360,000.
If your super balance is below $500,000 on the prior 30 June, and you want to quickly increase the amount you hold in super, you can utilise any unused concessional super contributions amounts from the last 5 years.
Let’s look at the example of Gary who has only been using $15,000 of his concessional super cap for the last few years. Gary’s super balance at 30 June 2023 was $300,000, so he is well within the limit to make catch up contributions.
| Concessional Cap | Used | Unused | |
| 2018-19 | $25,000 | $15,000 | $10,000 |
| 2019-20 | $25,000 | $15,000 | $10,000 |
| 2020-21 | $25,000 | $15,000 | $10,000 |
| 2021-22 | $27,500 | $15,000 | $12,500 |
| 2022-23 | $27,500 | $15,000 | $12,500 |
| 2023-24 | $27,500 | ? | ? |
Gary could access his $27,500 concessional cap for 2023-24 plus the unused $55,000 from the prior 5 financial years.
If Gary doesn’t access the unused amounts from 2018-19 by 30 June 2024, the $10,000 will no longer be available.
The general rate for the transfer balance cap (TBC), that limits how much money you can transfer into a tax-free retirement account, will remain at $1.9 million for 2024-25. The TBC is indexed by the December consumer price index (CPI) each year.
Australians love property and the lure of a 15% preferential tax rate on income during the accumulation phase, and potentially no tax during retirement, is a strong incentive for many SMSF trustees to dream of large returns from property development. We look at the pros, cons, and problems that often occur.
An SMSF can invest in property development if trustees ensure the investment complies with the rules. And, there are a lot of rules. A key is the sole purpose test. Trustees need to ensure the fund is maintained to provide benefits for retirement, ill health or death. Breaches of this fundamental tenet are serious and include the loss of the fund’s concessional tax treatment and civil and criminal penalties.
By its nature property development is high risk and fund trustees need to ensure that the SMSF is not simply a handy cash-cow for a pipe dream, particularly when the developers are related parties.
There are multiple ways an SMSF can invest in property development if the investment strategy of the fund allows:
An SMSF can purchase land from an unrelated party and develop the property in its own right. Common issues that often arise include:
Acquiring the land from a related party - An SMSF cannot purchase land from a related party (unless it is business real property used wholly and exclusively in a business). This means that the lovely block of land inherited by one of the members, or owned by a family trust, that is perfect for development cannot be purchased by the SMSF.
An SMSF cannot borrow to develop property – An SMSF can borrow money to purchase land using a limited recourse borrowing arrangement but it cannot use a loan to improve the asset. That is, borrowings cannot be used to develop the land. And, where the SMSF has borrowed to purchase land, it cannot change the nature of that asset until the loan has been repaid. That is, no development.
Who will develop the property? - Problems often occur when the property developers are related to the fund members. Whilst it is possible to engage a related party builder to undertake the work, there are strict rules that mean that the work and materials must be acquired at market value. That is, there is no advantage from “mates rates”. If you are using a related party builder, ensure that the paperwork is pristine, any transactions are at market value, and all interactions are documented.
GST might apply - Goods and services tax might apply to the development and the sale of any developed property. If the ATO considers that an SMSF is in the business of developing property or is undertaking a one-off development in a commercial manner then GST could potentially apply.
If your SMSF is not undertaking a property development project in its own right, there are a few ways for an SMSF to invest in property development projects:
An ungeared company or trust is often used (under SIS Regulation, section 13.22C) when related parties want to invest in a property development together. The SMSF can invest in a company or trust that is undertaking a property development as long as the company or trust:
See section 13.22C for full details.
Profits from the company or trust are then distributed to the SMSF according to its share.
Using the provisions of 13.22C means that the SMSF can invest in property development with a related party without the development being considered an in-house asset. However, if the criteria are not met (at any point), the in-house asset rules apply, and the SMSF might have to sell the units in the trust or shares in the company to return to the maximum 5% in-house asset limit. Generally, this means the sale of the underlying property or a significant restructure.
Problems arise with 13.22C arrangements where the trust or company:
One of the criteria for the exemption in 13.22C to apply is that the trust or company cannot be conducting a business. This requirement may prevent short-term property developments that are built and sold for profit.
Typically, 13.22C arrangements are used for long term investments where the development enables the creation of an asset that is then leased by the trust or company. This could be commercial premises leased to a related or unrelated party (e.g., premises for a child care centre or manufacturing), or residential premises leased to unrelated parties (e.g., townhouses or small developments).
Investing in unrelated entities for a property development is attractive as there is no limit to how much of the fund’s assets can be invested (subject to the investment strategy and trust deed allowing the investment), and unlike ungeared entities, the entity is able to borrow money/place charge over the assets.
Where related parties are investing in the same entity, there are rules governing the percentage of ownership the SMSF and their related parties can hold. To meet the definition of unrelated entity for in-house asset purposes, the SMSF and their related parties must not own more than 50% of the units available. This is because the SMSF cannot control or hold sufficient influence over the entity and remain an unrelated entity. If the ATO considers the entity is related to the SMSF, then it would become a related party and the investment an in-house asset.
An SMSF can potentially invest in a joint venture (JV) property development, but the criteria are necessarily strict and there are a range of issues that need to be considered carefully. One of the issues that needs to be considered up-front is determining the substance of the arrangement between the parties, because the term JV can be used to describe a variety of arrangements. The ATO confirms that care must be taken to ensure that arrangements with related parties are true JVs.
Under a JV, the SMSF invests in and has a share of the property being developed (not the entity undertaking the development). Each party bears the costs (time and/or money) of the JV and receives this same proportionate contribution from the returns. If the arrangement is not structured properly then the SMSF’s stake in the JV could be treated as an investment in or loan to a related party and be treated as an in-house asset. For example, this could be the case if the SMSF only provides a capital outlay for the arrangement and has no rights other than a contractual right to a return on the final investment.
It is also necessary to consider whether the arrangement between the parties could be treated as a partnership for tax, GST and legal purposes. For example, this could be the case if the arrangement involves the sharing of income, sale proceeds or profits, rather than sharing the output from the project.
It's essential to get advice well in advance – tax, legal and financial - before pursuing a JV.
Trustees need to carefully consider any investment decisions and have a sound rationale for the investment.
Any advice on a property development needs to be from a licenced financial adviser. A lawyer should be used for any contracts or agreements between parties. And, compliance assistance from a qualified accountant.
