It’s always interesting watching the dust settle on a Federal Budget – seeing what captures the attention of the media, the analysts and, of course, the public.

Sticky inflation is the term we keep hearing and there have been mixed views as to whether this budget will be stimulatory, especially with the Stage Three Tax Cuts and other spending announcements- this remains to be seen.

There wasn’t a lot in this budget for small business, in fact there wasn’t much announced that we hadn’t heard about previously. Further, what was announced lacked impact for a lot of Australia. The overarching view was that there wasn’t a huge amount of policy change or direction in the budget, and certainly no tax reform.

What was there for small business and individuals?

The instant asset write-off for eligible small businesses has been extended to 30 June 2025.  This means businesses with aggregated turnover of less than $10 million can write off assets that cost less than $20,000 immediately.  It is important to note that the legislation enacting the extension of the small business instant asset write off to 30 June 2024 is yet to be passed by Parliament.

The Stage Three Tax Cuts were a headliner in the budget.  These were announced and enacted back in January.  Whilst they will have a positive financial impact on many Australians from 1 July 2024, it’s really only addressing tax bracket creep due to wage growth over time, not systemic tax reform.

The ATO has received a further $2 billion to combat fraud including funds to identify and block suspicious activities in real time, stop fraudulent refunds, extend the tax avoidance task force for another two years and extend the personal income tax compliance program.  The ATO can also now hold a GST refund for 30 days before paying, an increase from the current 14 days.

The ATO has also been funded to work on Digital ID, myGovID and other government business services. We are hoping this will assist with client-agent linking and altogether make dealing with the ATO, the Australian Business Register and other government agencies much more streamlined.

Individuals and small businesses will receive energy bill relief in the form of a credit applied to quarterly energy bills – $300 for the year for individuals and $325 for small business.  This may actually reduce inflation by decreasing the top line cost of electricity which directly feeds into the inflation calculation.

Other initiatives which were funded in the budget include green energy, the Future Made in Australia Fund, support for farmers to prepare for climate change, the payment of superannuation on paid parental leave, and changes to student debt indexation.

If you have any questions in relation to the Federal Budget and the impact any announcements may have on you or your business, please contact your Holman Hodge adviser.