2023 Federal Budget Recap
It feels more often than annually that we write this blog but alas we’re in May already and it’s Jim Chalmers’ time to shine. As always you can delve into the ins and outs of the federal budget for hours – we’ve put together the key areas that were addressed on Tuesday night so you can get an overview in five minnies. Read on!
Cost of Living Crisis
The hottest topic in households and media at the moment is the astronomical costs of living in Australia right now. Something has to give. It was a big focus last night, here are the ways in which Labour plan on addressing it:
- Low income renters: the commonwealth rent assistance program is getting a boost with the maximum rate increasing by 15% as of September (subject to being passed in parliament). The fortnightly payment would increase from $157.20 to $180.80
- Jobseeker, Youth Allowance, Austudy and the partnered parenting payment will see a $40 increase in fortnightly payments
- Direct bill relief: Up to $500 will be up for grabs by people who are on government support payments, veterans, pensioners and concession card holders and $650 for small businesses to offset soaring electricity bills
- Single parents: previously, single parent payments stopped when the youngest child reached eight years of age – that is now being lifted to 14. This will mean a $176.90 fortnightly increase which will affect around 57,000 people – primarily women.
Until the end of the current financial year, businesses with up to a $5 billion turnover have been able to benefit from the instant asset write off scheme for any asset.
In this announcement, the instant asset write off scheme will revert back to its usual protocol of $20,000, for businesses with a turnover of up to $10 million, until EOFY next year.
Businesses with a turnover of less than $50 million will enjoy tax benefits under the Energy Incentive where up to $20,000 (or 20% of your spend) can be claimed for expenses related to electrifying your business – think heating and cooling, more energy efficient white goods or battery installation.
The desperately needed wage increase for aged care workers is here with $11.3 billion paying for an historic raise. For example, registered nurses in aged care will receive a pay rise of over $10,000 a year.
We can hear the collective cheer of parents with household incomes of less than $530,000 from here! Significantly higher subsidies will come into effect as of July 1 – graded as per your household income gradually. See the exact breakdown here.
- Some relief in the form of bulk billing is coming for pensioners, kids under 16 and concession card holders with the rebate tripling. This will be higher again for people in rural areas.
- Those on medications under the PBS will be stoked with prices effectively being halved on 320 drugs. People with chronic illness will also be able to purchase two months worth of medication at once, rather than the existing one month’s worth – saving them an additional co-payment.
As of July 2026, employers will be required to pay superannuation on payday, rather than having the option of paying the amounts owed quarterly. This is a big win for employees who will benefit from additional compounded interest whilst making it harder for employers to dodge super obligations.
The losers in these superannuation changes are those with a super balance of over $3 million – whose tax rates are going to double to 30% as of July 2025. It may sound drastic but will in reality only affect around 80,000 Australians.
The 2023 budget has caused less waves than previous years with no radical announcements or particularly contentious allocations (although pharmacists won’t agree). Where there’s money, there’s always hot debate to be had and there are plenty of fantastic resources for further budget reading if you’re interested. The ABC’s winners and losers article is always a goodie. The environment and women are two other winners in this budget, which we love to see.
Even better – Jason covered The Federal Budget on the newest episode of The Numbers Game. Listen to the pod here.
Questions? Concerns over how the budget may affect your individual or business position? You know where to find us.