2024–25 Federal Budget Highlights

The Federal Treasurer, Dr Jim Chalmers, handed down the 2024–25 Federal Budget at 7:30 pm (AEST) on 14 May 2024.

The key tax measures announced in the Budget include extending the $20,000 instant asset write-off for eligible businesses by 12 months until 30 June 2025, introducing tax incentives for hydrogen production and critical minerals production, strengthening foreign resident CGT rules and penalising multinationals that seek to avoid paying Australian royalty withholding tax.

The Budget also includes various amendments to previously announced measures and a number of income tax measures that have already been enacted before the Budget announcement, including the revised stage 3 personal income tax cuts that apply from 1 July 2024.

The tax and superannuation highlights are set out below.

Income Tax

• The instant asset write-off threshold of $20,000 for small businesses applying the simplified depreciation rules will be extended for 12 months until 30 June 2025.
• The foreign resident CGT regime will be strengthened for CGT events commencing on or after 1 July 2025.
• The Labor government’s 2022–23 Budget measure to deny deductions for payments relating to intangibles held in low- or no-tax jurisdictions is being discontinued.

Superannuation

• Superannuation will be paid on government-funded paid parental leave (PPL) for parents of babies born or adopted on or after 1 July 2025.
• The Fair Entitlements Guarantee Recovery Program will be recalibrated to pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024.

Tax Administration

• The ATO will be given a statutory discretion to not use a taxpayer’s refund to offset old tax debts on hold.
• Indexation of the Higher Education Loan Program (and other student loans) debt will be limited to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023.
• The ATO will have additional time to notify a taxpayer if it intends to retain a business activity statement refund for further investigation. The timeframe will increase from 14 to 28 days.

Please contact us if you would like to discuss any of the budget measures and how they might affect your business.