As the week closes on budget week, we have visited and surmised what you need to know about the Federal Budget for 2023-2024 and the impact on Financial Planning clients. As expected there are some items that will affect you so we recommend you talk to your Financial Adviser around the implications for you.
Key Budget Initiatives as we see them.
- Energy bill rebates of up to $500 for eligible households and $650 for eligible businesses
- Increased Centrelink payments across Jobseeker, Austudy, Youth allowance and Parenting allowances
- A $20,000 instant asset write off for eligible small businesses.
- Employer superannuation to be paid for staff by employers alongside staff salaries cycles.
- Additional 15% tax on Superfunds with balances exceeding $3 million.
- No changes to the minimum annual pension amount super pension drawdowns
So, what do these and the other relevant changes mean for you and your family?
Superannuation Changes
One of the larger impacts for our clients are for those who have Superannuation Balances over $3 million. The impact of the “30% fund tax” will be reduced considerably for most funds given the way tax is calculated within the fund however it is still a point for discussion at your next review meeting with your adviser as it does have Financial Planning impact
Additionally, the government will legislate to force all employers to pay superannuation at the same time wages are paid. This legislation will assist with the current time frame lag of payments and improve the incidence of “non-payments”.
And finally those in superannuation pension phase will be required to increase their minimum pensions for the 23/24 tax year to the “pre-covid” percentages.
Small business
The extension of the instant asset write-off for businesses with less than $10m of turnover will continue to June 2024. Note that this limit is on a “per asset” basis.
There is also a move to help simplify the tax system for small business. Funding has been provided to conduct trials into how to best achieve a lower cost for small business and efficiency for lodging tax returns.
Finally the government has also extended the incentive for small business to claim up to $20,000 in deductions to electrify or improve energy efficiency in their business. This creates some great financial planning opportunities for your business.
Social Security
Energy Price relief plan will be reduced down to $350 for West Australians given the lower energy prices in WA, with business maintaining at the $650. This is part of a $1.5billion, 2 year commitment from the government.
Furthermore, the government has committed to giving a 15% increase to Aged Care workers to assist in attracting and retaining these key people in the work force. We also noted an expansion of the home care package program which will be of interest to a number of our clients.
Medical costs and bulk billing for children under 16 has been given a boost to make sure the incentive is there for doctors to make health care more affordable to this demographic and their families.
Other interesting changes
The budget has allocated funds to establish an Environment Protection Agency to help strengthen policy in this area
Low interest loans will be offered to households looking to improve energy efficiency – items like glass glazing, solar panels and insulation are included.
Like always with the budget, some of this is yet to be legislated so please discuss any queries you have with your Boutique Financial Adviser by calling 08 9381 8779.