Treasurer Jim Chalmers delivered the 2024 Federal Budget and, despite the major issue of inflation, the Government has decided to substantially increase spending and provide a $300 energy boost to all Australians.
There were no major announcements during this budget; however, below is a summary of some of the changes that may affect you:
Energy Boost
The most controversial announcement in the budget was the $300 energy boost that every Australian household will receive via a reduction in their energy bills. A lot of politicians questioned this on budget night, saying they did not need this relief and that it could have been better targeted. The Treasurer believes this will push inflation down as the CPI data would have a lower recorded figure; however, in reality it is providing more money in the economy so there will be more spending.
There will also be energy bill relief for small businesses who, if eligible, will receive a rebate of $325.
Personal Tax Cuts
As previously announced, the Government will be reducing the personal tax rates from 1 July 2024 with a focus on low and middle income earners. Below are the current and new tax rates.
Instant Asset Write Off
The Government has increased the lifespan of the $20,000 instant asset write off for another twelve months, so it will now end on 30 June 2025. This is available for small businesses with turnovers under $10 million.
Retaining BAS Refunds
The Government has increased the time the ATO can retain BAS refunds for further investigation from 14 days to 30 days. This is a major inconvenience for taxpayers who are waiting for legitimate BAS refunds and could result in cash flow issues.
Education Loan Reform
The Government has successfully identified the issue of high indexation of student loans and rectified the problem by limiting the indexation of these loans by capping it at the lower of either CPI or the wage price index. This will be applied retrospectively to 1 June 2023 to reduce the significant interest charges that were applied to these loans.
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