Federal Budget 2023-24

On Tuesday 9 May, the Federal Government handed down its Budget for 2023-24. 

The main theme of this year’s Budget was no surprise: cost of living relief dominated the key measures.

Another focus of the Budget was, as pre-empted by the Treasurer, growing the economy and ensuring Australia is “more resilient to international shocks”.

For employers, the key announcements included super pay day, instant asset write-off extension, parental and domestic violence leave, and pensioners’ work bonus. Outlined below is what these changes may mean for your business if they become law. 

Super

Pay day super

From 1 July 2026, employers will be required to pay their employees’ super contributions at the same time as their salary and wages. While many employers already pay super at this frequency, there are a portion of employers paying on a quarterly basis, as currently required by legislation.

The requirement for employers to pay employees’ super at the same time as their salary or wages will make it easier for employees to keep track of their contributions and increase their overall retirement benefit.

The government also announced additional funding to the ATO in 2023–24 to improve its ability to identify and act on cases of super guarantee underpayment by employers.

Business tax

$20,000 instant asset write-off

The government announced it will temporarily increase the instant asset write-off threshold to $20,000, from 1 July 2023 until 30 June 2024.

Small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

Women’s economic equality

Flexible parental leave and domestic violence leave

On 1 July, Australians will begin to benefit from an enhanced and more flexible Paid Parental Leave scheme, off the October Budget’s commitment of $531.6 million. Parental Leave Pay and Dad and Partner Pay will combine into a single 20-week payment. Further, a new family income test of $350,000 per annum will see nearly 3,000 additional parents become eligible each year. The government has committed to increase paid parental leave to 26 weeks by 2026.

In addition, almost $590 million will be dedicated to the National Plan to End Violence Against Women and Children 2022-32. Workers will have access to 10 days of paid Family and Domestic Violence Leave, for businesses with 15 or more employees. The entitlement will take effect for most employees from 1 February, with small businesses receiving an extra six months to adjust to the change.

Social security

Incentive for pensioners extended

The government re-announced it will extend the measure to provide age and veterans pensioners a once-off credit of $4,000 to their Work Bonus income bank and temporarily increase the maximum income bank until 31 December 2023.

Under this measure, pensioners can earn up to $11,800 before their pension is reduced, supporting pensioners who want to work, or work more hours, to do so without losing their pension. 

Net zero industries

Green businesses rewarded

The Budget included $314 million in tax cuts for businesses that ’go green’. Small and medium-size businesses that invest in energy efficient equipment could be eligible for a tax deduction of up to $20,000. However, to combat misuse, the government is also providing $4.3 million in funding for ASIC to expand surveillance and enforcement functions on businesses making green claims.