2023 Federal Budget Update

Binghay Co • May 10, 2023

The 2023 Federal Budget Analysis below are proposals only and may not be made law. The information contained below is general advice and should not be used to make decisions regarding your personal situation. Please contact our office on (03)9770-0099 to discuss your personal situation.


Summary


Key proposals include:

  • Energy relief will provide savings of up to $500 for eligible households and $650 for eligible businesses.
  • Increased payments will be made to eligible income support recipients.
  • The instant asset write-off threshold for eligible small businesses will increase to $20,000 in 2023/24.
  • Employers will be required to make super contributions for their employees at the same time as they pay salary and wages.
  • The additional 15% tax on calculated earnings for super balances exceeding $3m has been confirmed.


Cost of living and housing measures


$500 electricity bill relief


Effective date: 1 July 2023


A credit of up to $500 will apply to electricity bills for eligible households to assist them with the high cost of electricity. The amount of credit will depend on where the person lives, as the Government is negotiating agreements with the States and Territories to contribute to the cost of the scheme. The following individuals will be eligible for the electricity bill credit:

  • pensioners
  • veterans
  • concession card holders including the Commonwealth Seniors Health Card
  • recipients of Carer Allowance and Family Tax Benefit A and B, and
  • those who are eligible for existing State and Territory electricity concession schemes.


Household energy upgrade


Effective date: Not stated


More than 110,000 low-interest loans will be available for energy-saving home upgrades (eg battery- ready solar power and modern appliances that heat and cool).

 


Expansion of Home Guarantee Schemes


Effective date: 1 July 2023


The Home Guarantee Schemes will be expanded to allow more individuals to buy a home. This includes the First Home Guarantee, Regional First Home Buyer Guarantee and Family Home Guarantee. Under these schemes, the Federal government acts as guarantor for a portion of a loan, allowing a house to be purchased with a low deposit and no lender’s mortgage insurance.


Siblings, friends, and other family members will be eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee. Currently, these guarantees are restricted to married or de facto couples, in addition to singles.


The Family Home Guarantee will expand from single natural or adoptive parents with dependents to single legal guardians of children including aunts, uncles, and grandparents.


The schemes will include:

  • non-first home buyers who have not owned a property in Australia in the last 10 years, to support those who’ve lost home ownership due to financial crisis or relationship breakdown, and
  • eligible borrowers who are Australian Permanent Residents, in addition to Australian citizens.



Incentive for build-to-rent houses


Effective date: 1 July 2024


The final withholding tax rate is proposed to reduce from 30% to 15% for eligible fund payments from managed investment trusts attributed to newly constructed build‑to‑rent developments. This provides an incentive for foreign investors. Construction must commence after 7.30pm AEST on 9 May 2023 (Budget night).

Furthermore, the capital works tax deduction (depreciation) rate is proposed to increase from 2.5% to 4% per year, increasing the net return for these developments.

 


Taxation


Small business instant asset write-off


Effective date: 1 July 2023 to 30 June 2024


The instant asset write-off threshold increases to $20,000. Small businesses with aggregated annual turnover below $10 million can immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed between 1 July 2023 and 30 June 2024.


The threshold applies on a per asset basis. Assets valued at $20,000 or more can continue to be placed into a depreciation pool and depreciated at 15% in the first year and 30% thereafter.

 


Small and medium-sized business energy incentive


Effective date: 1 July 2023 to 30 June 2024


Businesses with an annual turnover of less than $50 million will get an additional 20% tax deduction on spending that supports electrification and more efficient use of energy. Up to $100,000 of this expenditure will be eligible for the additional 20% tax deduction, providing a benefit up to $20,000.


Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.


This measure will help eligible businesses to:

  • convert to electric heating and cooling systems
  • upgrade to more efficient fridges and induction cooktops, and
  • install batteries and heat pumps

 


Electricity bill relief for small businesses


Effective date: 1 July 2023


Eligible small businesses will receive a $325 Commonwealth rebate to reduce the cost of their electricity bills. The government is negotiating with the States and Territories to match this contribution, taking total relief to $650.

 


Increase in the Medicare levy low-income thresholds


Effective date: 1 July 2022


The Medicare levy low-income thresholds will increase as follows:

  • The threshold for singles will be increased from $23,365 to $24,276
  • The family threshold will be increased from $39,402 to $40,939
  • For single seniors and pensioners, the threshold will be increased from $36,926 to $38,365
  • The family threshold for seniors and pensioners will be increased from $51,401 to $53,406

For each dependent child or student, thae family income thresholds will increase by a further $3,760 instead of the previous amount of $3,619.

The increase in the thresholds provides cost-of-living relief by taking account of recent CPI outcomes so that low-income individuals continue to be exempt from paying the Medicare levy.

 


Exempting lump sum payments in arrears from Medicare levy


Effective date: 1 July 2024


Low-income taxpayers will not pay higher amounts of Medicare levy if receiving an eligible lump sum payment (eg a compensation payment or underpaid wages). Taxpayers must be eligible for a reduction in the Medicare levy in the two most recent years to which the lump sum accrues. A lump sum payment in arrears tax offset already exists to reduce tax payable and Medicare levy surcharge. The eligibility criteria for the current tax offset will also apply for the proposed exemption of Medicare levy.

 


Extending the Personal Income Tax Compliance Program


Already effective


The Government will extend its Personal Income Tax Compliance Program and expand the scope to address emerging areas of risk (eg deductions relating to short-term rental properties to ensure they are genuinely available to rent).

 

Stage 3 tax cuts

There was no mention of changes to the Stage 3 personal marginal income tax cuts (for resident taxpayers), which have already been legislated to commence from 1 July 2024.


 

Social Security and Aged Care


Increased JobSeeker Payments


Effective date: 20 September 2023


Income support for working age and student payments will increase by $40 per fortnight. This increase will apply to:

  • JobSeeker Payment
  • Youth Allowance
  • Parenting Payment (Partnered)
  • Austudy
  • ABSTUDY
  • Disability Support Pension (Youth), and
  • Special Benefit

This is in addition to the indexation of payments which occurs on 20 September 2023.


The higher single JobSeeker Payment rate for those aged 60 and over who have been on payments for at least nine months, currently $745.20 per fortnight, will be available for recipients aged 55 years and older.

 


Increase in Commonwealth Rent Assistance


Effective date: 20 September 2023


The maximum Commonwealth Rent Assistance will increase by 15%.

Rent assistance will also index on 20 September 2023 as part of the twice annual review of rates.

 


Changes to Parenting Payment (Single)


Effective date: 20 September 2023


Parenting Payment for single parents of $922.10 per fortnight can be paid until the youngest child turns 14.

Currently, this payment is paid to eligible single parents if their youngest child is less than eight years old.

 


Additional funding for aged care


Effective date: 1 July 2023


The Government will provide additional funding to improve in-home aged care services. Among the measures it will fund is the release of 9,500 additional Home Care Packages in 2023/24. The additional Home Care Packages will reduce waiting times for clients, which are over 12 months for Level 3 and Level 4 packages.

A new Age Care Act is due to commence from 1 July 2024.

 


More affordable health care


Effective date: 1 July 2023


Individuals will be allowed to buy twice as many common medicines for the price of one prescription under changes to the Pharmaceutical Benefits Scheme (PBS) from 1 July 2023. This would allow a patient access to 60 days’ worth of medicine for each prescription. The change could save general patients up to $180 a year per prescription. New medicines will also be included on the PBS list to make these more affordable and easier to access.


GPs will be better incentivised to bulk bill consultations for children under 16, pensioners and other Commonwealth concession card holders.

 


Superannuation


Payday super


Effective date: 1 July 2026


Employers will be required to pay their employees’ super at the same time as salary and wages, via single touch payroll. This measure will make it easier for employees to monitor their employer’s payments. It’s also expected to reduce employer non-payments that result from superannuation liabilities building up over a quarter. The ATO estimates that $3.4 billion of workers’ super was unpaid in 2019/20.


The ATO will be provided with $40 million in additional funding to improve data matching capabilities, to detect and recover unpaid super payments. The ATO will also have enhanced unpaid superannuation recovery targets.

 


Non-arm’s length income


The non-arm’s length income (NALI) provisions that result from the underpayment of general expenses for SMSFs and small APRA funds will be limited to twice the level of the general expense that would otherwise have been incurred. In addition, the fund income that is subject to NALI (and taxed at 45%) will exclude taxable contributions.


This is better than the previously announced general expense treatment of applying NALI to five times the general expense under payment. Small funds will still need to carefully monitor any discounts for general expenses, such as the provision of tax and accounting services from a related party.


Large APRA regulated funds will be exempt from the NALI provisions for both general expenses and asset specific expenses.

 


Better targeted superannuation concessions


Effective date: 1 July 2025


The Government confirmed the previously announced proposal to apply additional 15% tax on calculated earnings where the total super balance exceeds $3 million. This is in addition to the existing super fund tax rate. The ATO’s first assessments will be made for the 2026/27 financial year. This will capture all superannuation funds, including defined benefit funds which will be subject to a valuation process to ensure these are treated in a similar way to other superannuation interests.

 


Increase in APRA superannuation supervisory levy


Effective date: 1 July 2023


The Government will provide further funding for the superannuation consumer advocate, which will be offset by an increase in the superannuation supervisory levy paid by APRA regulated funds. Details on the increase in the levy have not yet been released.

 

 

 

Important information and disclaimer


The information in this communication is factual in nature. It reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue, and may be subject to change. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Examples are illustrative only and are subject to the assumptions and qualifications disclosed.


This communication is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of Binghay & Co.


Whilst care has been taken in preparing the content, no liability is accepted for any errors or omissions in this communication, and/or losses or liabilities arising from any reliance on this communication.


If you want to learn more about this topic and how we can help your business, contact us to set up a FREE consultation so we can get started. 


Binghay & Co are Accountants & Business Advisors located in Docklands, Melbourne.

What the new anti-money laundering and counter-terrorism financing rules mean for our services

By Binghay Co • July 27, 2026
From 1 July 2026, thousands more businesses—including accounting and professional services firms - are now regulated under Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. This includes newly regulated sectors such as accounting, real estate, conveyancing, legal services, as well as dealers in precious stones and metals.Under these new laws, such businesses must meet additional obligations, including: - implementing AML/CTF programs, - conducting customer due diligence, - reporting suspicious matters, and - keeping relevant records. Are all accounting services now regulated? In short, no. Only some services provided by accountants are considered regulated services (known as designated services). Some examples of when the AML/CTF regulations may now apply include when an accountancy firm: - helps create or restructure a company, - assists in the planning or execution of a transaction to sell, buy, or transfer a company, - receives, holds, controls or manages a client’s money to help plan or execute a transaction, - provides a registered office or principal place of business address. This list isn’t exhaustive. For a full list of designated services, refer to AUSTRAC’s website.As a general rule, general tax return preparation, bookkeeping, and payroll services are not considered designated services. What do these changes mean? Some of our onboarding and engagement processes may look a little different from 1 July, and we may have some additional questions or require extra documentation before we start to provide a designated service. These changes are necessary for us to remain compliant with AML/CTF laws, no matter how long we’ve worked with a client. If you have any questions about these changes, as ever, please feel free to get in touch.

Managing the transition to Payday Super

By Binghay Co • June 1, 2026
In just a few weeks, Payday Super will finally go live. From 1 July 2026, quarterly super contributions for employees will end. Instead, employees’ super will need to be paid at the same time as their salary and wages, with payments typically due in employees’ super accounts within seven business days after payday. But with such a big change on the horizon, employers need to know the process for settling their employees’ super obligations for the quarter ending 30 June 2026, and how to smoothly transition to the new Payday Super rules from 1 July 2026. Settling super for the quarter ended 30 June 2026 The quarter ended 30 June 2026 is the last period for which the current quarterly super payment rules apply. Employers will need to calculate their employees’ super based on their ordinary time earnings and pay that amount in full, on time, and to the correct fund by 28 July 2026. If an employer misses the 28 July deadline, a super guarantee charge (SGC) statement will need to be filed and any SGC paid for the quarter ended 30 June. Note that the late payment offset is not available for this final quarterly payment. Crucially, keep in mind that any super payments received on or after 29 July will be applied under the new Payday Super rules, even if the employer intended these payments to be made for any super owed for the June quarter. Running payroll under Payday Super From 1 July 2026, Payday Super is in effect, with super guarantee payments based on an employee’s qualifying earnings from 1 July 2026 (even if the work that earned that pay was done before 1 July). Under Payday Super, super guarantee payments should generally arrive within an employee’s super account within seven business days after payday (there are times when this deadline is longer, for example in the case of a new hire). Be aware though, any contributions received into an employee’s fund on or before 28 July will actually reduce any super owing for the quarter to 30 June 2026 in the first instance. Once super for the June quarter has been settled, any remaining contributions will then be counted towards the amount due under Payday Super. While this is an important quirk in the rules, the reality is that if an employer pays the correct amount for both their June quarter and first Payday Super payment, then both sets of contributions will be made on time, and there won’t be any risk of incurring penalties for late payment. Ready for Payday Super? Do you have any last-minute questions about Payday Super, or worried about how to handle the changeover period? Speak to a member of our team today – we’d be happy to help.

Federal Budget 2026-27: Key Announcements

By Binghay Co • May 15, 2026
On Tuesday, 12 May 2026, Treasurer Jim Chalmers delivered the ‘most important and ambitious Budget in decades’. Certainly, the 2026-27 Federal Budget was ambitious, announcing significant reforms to capital gains tax and negative gearing in a bid to support home ownership and improve the fairness of the tax system. Outside of those headline changes, targeted cost-of-living support was announced for Australian workers, including a $250 Working Australians Tax Offset, while businesses also received some relief thanks to the $20,000 instant asset write-off being made permanent, alongside loss relief reforms for companies. Key Budget tax announcements Capital gains tax reform From 1 July 2027, the 50% capital gains tax discount (which was introduced back in 1999) will be replaced by cost base indexation for assets held for more than 12 months, with a 30% minimum tax imposed on most net capital gains. 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This change applies to individuals, partnerships, companies and most trusts. Superannuation funds, including SMSFs, are excluded from the changes. Investors in established residential properties acquired prior to 7:30pm AEST 12 May 2026 can continue to apply the current negative gearing rules until the property is sold. Properties purchased between announcement and 30 June 2027 may be negatively geared during this period, but not from 1 July 2027. A specific carve out is included for investments in eligible new builds, which can continue to be negatively geared before and after 1 July 2027 (i.e. current negative gearing rules remain in place). Individuals A new, permanent Working Australians Tax Offset of $250 will apply from 1 July 2027, available to those who derive income from work, such as employees and sole traders. Originally announced during the 2025 Federal election and reconfirmed at the Federal Budget, a $1,000 instant tax deduction is to be introduced from 1 July 2026, benefitting Australian tax residents who have low work-related deductions. Importantly, there will be no substantiation requirements to claim the deduction. Individuals with work-related expenses over $1,000, or who earn only business or investment income, can continue to claim their deductions in the usual way. While not a new Federal Budget measure, already-legislated changes in personal tax rates will shortly come into effect. From 1 July 2026, the tax rate that applies to taxable income between $18,201 and $45,000 will reduce from 16% to 15%, falling further to 14% from 1 July 2027. Instant asset write-off now permanent From 1 July 2026, the instant asset write-off is permanently extended to $20,000 for small businesses with turnover up to $10 million. 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Minimum tax on discretionary trusts From 1 July 2028, and subject to certain exceptions, trustees will pay a minimum tax of 30% on the taxable income of discretionary trusts. Beneficiaries, other than corporate beneficiaries, will receive non-refundable credits for the tax payable by the trustee. This change does not apply to other types of trusts (e.g. fixed and widely held trusts (including fixed testamentary trusts), complying superannuation funds, special disability trusts, deceased estates and charitable trusts). Expanded rollover relief will be provided for three years from 1 July 2027 to support small businesses and others that wish to restructure out of discretionary trusts into another entity type, such as a company or a fixed trust. Fringe Benefits Tax and EVs From 1 April 2029, a permanent 25% discount on fringe benefits tax (FBT) will be available for all electric cars valued up to and including the fuel‑efficient luxury car tax threshold. 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