With an election just weeks away, it’s no surprise that this year’s Federal Budget focuses more on short-term relief than long-term reform. There are some modest wins for individuals and households. But for small business owners, employers, investors, and clients with trusts, property, or offshore interests — this was a budget light on substance, and heavy on omissions.
Here’s what matters — and what’s still frustratingly missing.
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KEY CHANGES FOR INDIVIDUALS
Stage 3 Tax Cuts Reworked
Middle-income earners benefit most:
- The 32.5% tax rate drops to 30%
- Applies to income between $45,000 and $135,000
- Higher incomes still taxed at 37% and 45%
So… is this the “$5-a-week tax cut”?
Yes — for many Australians, that’s exactly what it is.
If you earn around $50,000–$60,000, the annual saving is around $250 — or $5 a week.
It’s better than nothing, but won’t make a serious dent in household budgets.
Higher earners could see up to $1,500 in annual savings.
Superannuation Guarantee (SG) Increases
- From 1 July 2024 → SG rate increases to 11.5%
- From 1 July 2025 → SG rises again to 12%
Medicare Levy Thresholds Increased
To ease cost-of-living pressures:
- Individuals: Threshold increased to $26,000
- Families: Threshold increased to $43,846 (plus more per dependent child)
- This means more low- and middle-income earners will pay less or no Medicare Levy in 2024–25.
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HOUSEHOLDS & SMALL BUSINESS
Cost-of-Living Measures
- $300 electricity rebate for all households
→ Applied as $75 per quarter
→ Some households may see up to $170–$180 total, depending on how the rebate is split - Indexation freezes on selected government charges
- Boosted Medicare and urgent care funding
- Cheaper PBS-listed medications
Education and Housing
- HECS/HELP debt relief for eligible students
- More apprenticeship and trades training incentives
- Target to build 1.2 million homes by 2030
Ban on Foreign Home Buyers
The government has extended the existing ban on foreign buyers of established residential property. This is intended to support housing affordability, although the real impact is debatable.
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ATO COMPLIANCE CRACKDOWN $2.2 BILLION IN NEW FUNDING
The ATO has received $2.2 billion in additional funding to extend its Tax Avoidance Taskforce through to 2029. Here’s what to expect:
- Increased audits
- Real-time data matching
- Closer scrutiny of superannuation, wages, trust structures, and offshore dealings
- Key ATO focus areas include:
- Trust distributions
- Division 7A loans and unpaid present entitlements (UPEs)
- Contractor vs employee classification
- Lifestyle vs income mismatches
- CGT timing on real property
- Cross-border interest deductions
- Super compliance — especially late payments
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WHAT’S MISSING FROM THE BUDGET ( AND WHY THIS MATTERS ) – >
- No extension of the $20,000 instant asset write-off (currently ending 30 June 2025)
- No tax cuts or simplification for small business
- No new concessions or support for digital or admin upgrades
- No reform to business succession, CGT rollover relief, or estate planning frameworks
- No change to superannuation contribution caps
- No death or inheritance tax introduced — discussion is expected to come at some stage
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WHAT YOU SHOULD DO BEFORE JUNE 30:
- Finalise your bookkeeping early for accurate tax planning
- Review trust distributions — especially to corporate beneficiaries
- Bring forward any asset purchases while the $20,000 write-off still applies
- Maximise super contributions before hitting the annual cap
- Prepare for future SG changes by reviewing payroll and cash flow systems
- Book your end-of-financial-year tax planning session early
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TECHNICAL & STRUCTURAL INSIGHTS
These complex areas were either lightly touched or completely ignored in the Budget, but they matter — especially for business owners, high-net-worth individuals, and those with cross-border considerations.
Payday Super: Coming 1 July 2026
Although not addressed in the Budget, legislation before Parliament would require employers to:
- Pay SG contributions at the same time as wages
- Make payments within 7 days of payday
- Rely on Single Touch Payroll (STP) data for real-time reporting
- Only on-time super payments will be tax-deductible
- Late super payments will not be deductible and will attract penalties
- This is a major change and will require systems, cash flow, and compliance preparation well in advance of the start date.
Division 296: 15% Super Tax on Balances Over $3 Million
Still unlegislated, but scheduled to begin 1 July 2025:
- A 15% additional tax on earnings relating to the portion of a person’s super balance over $3 million
- No clarity or commentary in the Budget
- Draft legislation remains stalled
- If you may be impacted, start reviewing structure, contributions, and estate implications now
Foreign Resident CGT and Tax Residency Reforms
- No progress on tightening the CGT main residence exemption for foreign residents — proposed back in 2019
- No reform of foreign company tax residency rules (despite long-standing industry demand)
- The individual residency framework (based on 183-day rule) still proposed for 1 July 2027 but remains unlegislated
- These areas are complex but critical for expats, foreign investors, and those with multinational structures
Managed Investment Trusts and Foreign Pension Funds
- No updates or modernisation of Australia’s MIT regime
- No reform of the treatment of foreign pension funds investing in Australia
- Missed opportunity to improve clarity and attract inbound investment
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FINAL THOUGHTS
This Budget offers modest relief for households but does little to address the ongoing challenges for small businesses. With no significant reform, business owners are left to manage rising compliance costs, wage pressures, and complex tax frameworks without new support. Meanwhile, the ATO has never been better resourced — and scrutiny is increasing.
Need help reviewing your strategy before 30 June?
We’re here to support you with practical advice, tax planning, and a fresh look at your structure, systems, and profitability.
