2024-25 Federal budget – The budget that appeared to forget Australia is built on small business.

Inflation and cost of living issues were referred to consistently in this budget – with the subtext being what will happen with interest rates.  Whether you believe Treasury estimates or the Reserve Bank views, inflation will continue to be a focus.

Considerable attention has been given to lowering the burden of increasing costs of living whilst trying to keep a lid on spending and the impact on budget surpluses/deficits.

This budget is built on the platform of tax cuts, cost-of-living relief and the focus on manufacturing in Australia but appears to provide very little in the way of direct support for small business.

Most small businesses already have very slim margins and, by all accounts, were desperate for a budget that helped alleviate the cost pressures and lower activity levels they are facing every day.

Cost of living relief through energy and rental subsidies features heavily as do the previously announced Stage 3 tax cuts & the Future Made in Australia mandate that will have details unveiled later this year.

Some of the important measures announced are as follows: –

1. Small Business Support – $20,000 instant asset write-off
   Extended to 30 June 2025

The Government has announced it will continue to improve cash flow and reduce compliance costs for small businesses by extending the $20,000 small business instant asset write-off by a further 12 months until 30 June 2025.This will be applicable to small businesses with an annual turnover of less than 10M.

2. Energy Bill relief for Small Business

The government will provide additional energy bill relief of $325 to eligible small business in 2024-25.

The Government says the rebates will automatically be applied to electricity bills and will be rolled out in quarterly instalments.

3. Pay Day Superannuation

Under the proposed changes, employers will be required to attend to Superannuation Guarantee obligations on the same day as salary and wage payments are made. This will be effective from 1 July 2026

4. Supporting Australian Small Business

A number of measures have been announced to provide targeted support such as

• several initiatives to support SMEs improve their cyber security preparedness, including access to free training, cyber incident support services and a cyber security self-assessment tool reduce red tape and increase opportunities for SME’s to tender for Government contracts, SME owners to access mental health support Etc.

5. Personal Income Tax Stage 3 Tax Cuts

• The 19% tax rate will be reduced to 16per cent.
• The 32.5% tax rate will be reduced to 30%.
• the income threshold above which the 37 per cent tax rate applies will be increased from $120,000 to $135,000.
• the income threshold above which the 45 per cent tax rate applies will be increased from $180,000 to $190,000.

6. Strengthening the foreign resident capital gains tax regime

The government will strengthen the foreign resident Capital Gains tax regime to ensure foreign residents pay tax on CGT assets and provide more certainty about the rules. Amendments will apply to CGT events commencing on or after 1 July 2025

7. Super on Paid Parental Leave

The Government will pay super on the Government funded Paid Parental Leave for babies born or adopted on or after 1 July 2025.

Eligible parents will receive an additional 12% of their Government-funded Paid Parental Leave as a contribution to their superannuation fund.

8. Strengthening Tax Compliance – extending the Personal Income Tax Compliance Program.

The Government will extend the ATO personal income tax compliance program for one year from 1 July 2027

The Government will extend the timeframe for the ATO to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation. The ATO’s mandatory notification period for BAS refund retention will be increased from 14 days to 30 days to align with time limits for non-BAS refunds.

9. Aged Care

• Improving Aged Care Support

In addition, the Government has announced it will provide funding over five years from 2023–24 to deliver a range of key aged care reforms and to continue to implement the recommendations from the Royal Commission into Aged Care Quality and Safety. These measures would include:

• 24,100 additional home care packages in 2024–25
  increasing the regulatory capability of the Aged Care Quality and Safety Commission and implementing a new aged care regulatory framework.
  additional funding to attract and retain aged care workers.
• investment to reduce wait times for the My Aged Care Contact

10. Other Measures which affect individuals

• HELP Debts

Those with HELP debts, VET student loans, Australian Apprenticeship Support Loans and other student loans will have debts reduced as the Government uses the lower of either CPI or the Wage Price Index. Loans will grow at the lower wage index rate of 3.2% rather than a 7.1% inflation rate, and the measure will be backdated to July 2023. The expected interest reduction on a $25,000 debt will be $1,120.

• Energy Subsidy

Energy relief worth $300 per household applied to electricity bills.