Federal Budget 2023-24

On Tuesday 9 May, the Federal Government handed down its Budget for 2023-24. The announcements were concentrated around providing support to ease the cost of living.

Here are some highlights from the Budget announcement and an explanation of what these changes may mean for you if they become law.

Pay day super

From 1 July 2026, employers will be required to pay super at the same time they pay salary and wages. Many employers have already adopted this approach even though currently, super is only required to be paid quarterly.

This is good news as super works on compound interest – where you earn interest on your interest, so receiving super contributions in line with your pay could potentially help you get more from your super over the long run.

This change will also make it easier for you to keep track of your super contributions, and harder for disreputable employers to avoid paying super.

To support this, the Government announced it will provide additional funding to the ATO in 2023-24 to improve its ability to identify and act on any cases of Super Guarantee underpayment by employers.

Watch Jackie Clark, National Education Manager, Colonial First State, outline what the key Budget measures mean for members.

More tax for high balances

As recently proposed, the government reinforced its plan to increase the tax on earnings on super balances over $3 million by 15%.

This will only affect a small proportion of the population who hold larger balances in super, and the tax would only be payable on earnings over this threshold. The additional 15% will apply regardless of whether they are in the accumulation phase of super, or if they have retired and have commenced a super pension.

Minimum pension payments set to revert

The minimum amount that was required to be paid to a member from their pension was halved in 2019-20. This was legislated to revert to the full amount from 1 July 2023. Given there wasn’t an announcement of an extension to the reduced minimum, the amount is likely to revert to 100 per cent of the standard minimum. 

Increase to Transfer Balance Cap

In February 2023, it was announced the Transfer Balance Cap would increase by $200,000 to $1.9 million on 1 July. This is the amount you can transfer from super to start a tax-free super pension, such as an account-based pension. Although there has been some speculation this would remain at its current level, the fact that it wasn’t announced in the Budget suggests it will increase as expected.

Relief on power bills

To ease the cost of living, the government has put forward a comprehensive $14.6 billion relief package. This includes $3 billion to help with the cost of energy. This will be provided in the form of credits of up to $500, offered to approximately 5 million eligible households and targeted to pensioners, Commonwealth Seniors Health Card holders and family tax benefit payment recipients.

Ending violence against women and children

A $590 million investment in women’s safety was announced as part of this year’s Budget. As part of this, the government would work with states and territories to end gender-based violence within a generation through the National Plan to End Violence Against Women and Children 2022-32.

This is over and above the $1.7 billion provided in the October 2022 Budget, as well as the 10 days of paid family and domestic violence leave the government introduced in February 2023.

Improving women’s health

A $53.4 million investment has been proposed to support research into women's health outcomes with a focus on investing in affordable, high-quality health care for women and girls. This will see the government support research and data collection for women and girls’ health outcomes and will make it cheaper to test for risk of recurrent breast cancer.

Making sure healthcare is affordable

One of the most important Budget announcements, according to Treasurer Jim Chalmers, was the $5.7 billion investment over five years to strengthen Medicare.

This package includes $3.5 billion to triple bulk billing incentives for GP appointments, and $2.2 billion for Medicare reforms including incentives for after-hours doctors.

Reducing the cost of prescriptions

Proposed changes to the Pharmaceutical Benefits Scheme will see dispensing timeframes extended to 60 days, up from 30 days, which will allow Australians to access two-for-one prescriptions for certain medications and is expected to save $1.6 billion.