2024 Australian Federal Budget Changes
This year’s Federal Budget was fairly-light on tax changes, and most had been previously announced. However, there were still some points of note for our clients, which we have summarised below. If you need more information, please contact joanne@fairwaytax.com.au
Personal Tax, Cost of Living and Superannuation
Amended Stage 3 Tax Cuts – from 1 July 24
The changes to the Stage 3 Tax Cuts have been heavily covered in the media, but it is worth reiterating these changes that apply from 1 July 24:
| Income Band | Tax Rate |
| $0 to $18200* | 0% |
| $18201 to $45,000 | Reduced from 19% to 16% |
| $45,001 to $135,000 (an increase in the top of the band from $120,000) | Reduced from 32.5% to 30% |
| $135,001 to $190,000 | 37% |
| Over $190,000 | 45% |
*Reduced for part-year residents
Increase in Medicare Low Income Thresholds
More low-income earners will be removed from the obligation to pay the Medicare Levy. The thresholds are increased as follows (backdated to 1 July 23):
| Group | Change in ML Low Income Threshold |
| Singles | From $24,276 to $26,000 |
| Families | From $40,939 to $43,846 |
| Single Seniors and Pensioners | From $38,365 to $41,089 |
| Family Seniors and Pensioners | From $53,406 to $57,198 |
The Family Thresholds increase by $4,027 for each dependent child, increased from $3,760.
Superannuation on Paid Parental Leave from 1 July 2025
From 1 July 2025 Superannuation Contribution Guarantee will be payable on Paid Parental Leave – this is part of the Governments package of measures to seek to close the gender gap in relation to superannuation savings.
Energy Bill Relief
All Australian households will receive an energy rebate of $300 in 2024-25, this will be received directly through your energy provider as a reduction on your energy bills and will be split into quarterly instalments.
Change in HECS/HELP Debt Indexation
Again, there has been considerable media attention on this measure but the change of the indexation rate for HECS/HELP debts to the lower of Consumer Price Index or Wage Price Index, and backdating it to 1 June 2023 will be welcome news to students and families with students.
Small Businesses
Extension of Instant Asset Write-Off – $20,000
The current Instant Asset Write-Off, which allows an immediate deduction for Small Businesses on eligible depreciating assets costing less than $20,000, which was due to end on 30 June 24 will be extended a further year to 30 June 25.
Energy Bill Relief
Small Businesses will also qualify for Energy Bill Relief of $325 in 2024-25, like the personal relief this will be received directly through a reduction of energy bills and split into quarterly instalments.
Other Changes
Tightening of Foreign Resident Capital Gains Tax Regime from 1 July 25
At present foreign residents are only subject to Australian Capital Gains Tax on Australian Real Property and Investments where the majority of the underlying assets represent Australian Real Property. The Government has announced plans to broaden the reach of Capital Gains Tax by:
- Clarifying and broadening the types of assets on which foreign residents are subject to Australian CGT
- Amending the point in time asset tests (for investments where underlying assets have to be assessed) to a 365-day testing period and
- Adding a disclosure notification requirement for significant (>$20m value) disposals of shares and membership interests by foreign residents
The amendments are proposed to apply for CGT events on or after 1 July 25, but the Government intends to consult on the proposed changes before implementation, so it will be some time before we know exactly what the changes will look like.
