This comprehensive guide unravels the intricacies of the latest pre election budget release for 2024-25. Here we delve into various aspects concerning government and regulators including the modernisation of digital assets, payment regulations, anti-fraud measures, and implications for the charity sector.
Alongside, it paints a vivid picture of the current economic landscape, exploring recent events affecting the economy, inflation rates, cash rates, and the government's proactive efforts to mitigate these challenges.
Interested in understanding how the budget impacts superannuation, investors, or small businesses? Explore our insightful blogs by clicking here:
The first four years of this decade have tested Australia's economy and the resilience of its people. From floods and bushfires to a once-in-a-century global pandemic, followed by the most significant international energy crisis in 50 years, these events have left a lasting mark. The combined impact disrupted supply chains, spiked energy prices, and drove inflation and interest rates higher. Though these challenges may now seem like distant memories, their effects continue to reverberate through the economy.
Australia continues to grapple with global uncertainties driven by persistent inflation in North America, slowing growth in China and other major economies, recessions in both the United Kingdom and Japan, and escalating tensions in the Middle East and Eastern Europe.
Inflation is moderating but remains above the target range of 2 to 3% set by monetary policy.
Michelle Marquardt, Head of Prices Statistics at the ABS, noted:
“Annually, the CPI rose by 3.6% up to the March 2024 quarter. Although prices continued to rise for most goods and services, annual CPI inflation decreased from 4.1% last quarter and has fallen significantly from its peak of 7.8% in December 2022.”
Rising inflation has increased the cost of living, with Australian households paying more for the same goods and services. The budget surplus in 2022–23 helped alleviate some inflationary pressures, allowing the Government to fund its priorities and reduce debt interest. While these are positive developments, the Government acknowledges the need for further and faster reduction in inflation. The budget measures aim to ease inflation without exacerbating it.
The cash rate currently stands at 4.35%. The RBA last raised the cash rate by 0.25% on 7 November 2023, intending to return inflation to the target range within a reasonable timeframe. While the prices of goods are moderating, services remain inflated. Higher interest rates have generally led to reduced consumer spending, which is slowing economic growth and aligning demand more closely with supply.
The government has allocated $7.5 million over four years starting from 2024–25, with an ongoing $1.5 million annually, to update regulatory frameworks for financial services. This initiative aims to enhance competition and bolster consumer protections for services driven by new technologies.
The Government's plans include:
The current charity transitional reporting arrangement will be extended for five years.
The Government will remake the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Regulation 2016 with an extension of the current charity transitional reporting arrangement for five years.
The purpose of the regulation is to reduce the regulatory reporting burden on certain not-for-profit entities (registered entities) under the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act) by providing that the ACNC Commissioner may treat a statement, report or other document given under an Australian law to an Australian Government agency by a registered entity as satisfying certain reporting obligations under the ACNC Act.
Date: First income year after Royal Assent of enabling legislation
The Government has announced a commitment of $187 million over four years, starting from 1 July 2024, to enhance the Australian Taxation Office's (ATO) capabilities in detecting, preventing, and mitigating fraud within the tax and superannuation systems.
Funding Breakdown:
Additionally, the Government will extend the ATO's notification period for retaining a business activity statement (BAS) refund for further investigation from 14 days to 30 days, aligning it with the time limits for non-BAS refunds. This extended period aims to bolster the ATO's fraud-combating efforts during peak fraud events, like Operation Protego, without significantly affecting legitimate refunds. Any legitimate refunds held for over 14 days will accrue interest payable to the taxpayer, as is currently the case. The ATO will also publish BAS processing times online.
This initiative is projected to increase receipts by $302.2 million and elevate payments by $187.4 million over the five years from 2023–24.
Effective from 1 July 2024, the Government will lower the overall levy rate on sweet potatoes from 1.5% to 0.5%.
The Australian Taxation Office (ATO) has received specific funding for key initiatives:
Personal Income Tax: The ATO’s Personal Income Tax Compliance Programme will be extended for one year starting 1 July 2027. This extension is projected to increase receipts by $180.3 million and payments by $44.3 million over the five years from 2023–24.
Shadow Economy: The ATO’s Shadow Economy Compliance Programme will be extended for two years starting 1 July 2026. This extension is expected to boost receipts by $1.9 billion and increase payments by $610.2 million over the five years from 2023–24. This includes an additional $429.6 million in GST payments to states and territories.
Anti-Avoidance Taskforce: The ATO’s Tax Avoidance Taskforce will be extended for two years starting 1 July 2026. This measure is anticipated to raise receipts by $2.4 billion and increase payments by $1.2 billion over the five years from 2023–24. The taskforce focuses on the top 1,100 public and multinational businesses, the top 500 privately-owned groups, and extends to all 5,000 high-wealth private groups with net wealth exceeding $50 million, as well as public and multinational businesses outside the ATO’s justified trust programmes. As of 30 June 2023, the taskforce has helped the ATO raise $32.7 billion in tax liabilities.
Child Care Providers: An allocation of $4.8 million over four years from 2024–25 will ensure satisfactory engagement with the Australian tax system regarding the fitness and propriety requirements of existing and new childcare providers, in relation to the Child Care Subsidy Programme.
Identity Checking: $155.6 million will be provided over two years from 2024–25 to continue the operation and improvement of the Government’s Digital ID, myGovID, and the system supporting authorised access to a range of government business services.
Migrant Workers: $1.9 million will be allocated in 2024–25 for a data-matching pilot between the Department of Home Affairs and the ATO to monitor income and employment data, aimed at preventing the exploitation of migrant workers and abuse of Australia’s labour market and migration system.
E-Invoicing: $23.3 million will be allocated over four years from 2024–25 to continue overseeing and operating the secure eInvoicing network. This initiative is part of the Government’s effort to combat scams and online fraud through the introduction of mandatory industry codes under a Scams Code Framework and increased use of the secure eInvoicing network.
Military Invalidity Payments: The Government will provide $11.9 million over five years from 2023–24 (and $0.9 million per year ongoing) to implement a social security means test for military invalidity payments affected by the Federal Court’s decision in FCT v Douglas [2020] FCAFC 220. This approach ensures that the Douglas decision does not impact income support payment rates for veterans receiving invalidity payments from the Military Superannuation and Benefits Scheme and the Defence Force Retirement and Death Benefits Scheme, compared to pre-Douglas arrangements.
In the Douglas decision, the Full Federal Court found that invalidity pensions paid under the Military Superannuation Benefits and Defence Force Retirement and Death Benefits schemes starting after 20 September 2007 were classified as ‘superannuation lump sum payments’ rather than ‘superannuation income stream benefits’ under the ITAA 1997.
Date: Royal Assent of Amending Legislation
The 2023-24 Budget measure to extend Part IVA, initially set to commence on 1 July 2024, has been postponed. It will now apply to income years starting on or after the date the amending legislation receives Royal Assent.
Part IVA includes the general anti-avoidance provisions that the ATO can use to tackle arrangements designed to obtain tax benefits.
With the new measure, the scope of Part IVA will be broadened to cover:
The implementation dates for the following components of the Fuel and Alcohol Excise Administration Enhancement Package have been adjusted:
Australian plantation forestry entities will be exempt from the new earnings-based thin capitalisation rule. The Multinational Tax Integrity Package, introduced in the 2022-23 October Budget, revised the thin capitalisation regulations, replacing the safe harbour and worldwide gearing tests with earnings-based assessments to align debt deductions with an entity’s profits.
However, Australian plantation forestry entities will continue to use the previous asset-based thin capitalisation rules.
Debts ‘On Hold’ Before 1 January 2017
The Government will amend tax law to grant the Commissioner of Taxation the discretion not to use a taxpayer’s refund to offset old tax debts, specifically for debts placed ‘on hold’ prior to 1 January 2017. This discretion will apply to individuals, small businesses, and not-for-profits, aligning with the Commissioner’s current administrative approach.
In 2023, the Australian National Audit Office advised the ATO that excluding debt from being offset was inconsistent with the law, regardless of the debt's origination date. This amendment addresses the issue for older debts but enforces the current practice for all debts from 1 January 2017 onward.
Effective from 1 July 2024
The Government has announced plans to recalibrate the Fair Entitlements Guarantee Recovery Programme to address unpaid superannuation entitlements owed by employers in liquidation or bankruptcy, starting from 1 July 2024.
The Fair Entitlements Guarantee Recovery Programme is designed to enhance the recovery of employment entitlements advanced under the Fair Entitlements Guarantee (FEG). The FEG serves as a legislative safety net of last resort, providing assistance to eligible employees.
Date: Four years from 2024–25
Over the next four years, beginning in 2024–25, $60 million will be allocated to enhance the Productivity, Education, and Training Fund. This funding aims to facilitate practical initiatives by employer and worker representatives to improve workplace productivity and foster tripartite cooperation. Additionally, it will aid workplaces in implementing policy changes, such as the introduction of payday superannuation.
Timeline: Four years from 2024–25
The Government will allocate $168 million over four years starting from 2024–25 to implement reforms aimed at strengthening Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
Between April and June 2023, the Attorney-General’s Department conducted an initial consultation round on proposed reforms to modernise Australia’s anti-money laundering and counter-terrorism financing regime. This followed the release of its first consultation paper. The Department received 142 submissions, which were broadly supportive of the reforms. Key aspects of the feedback included:
Funding Breakdown:
Greenwashing: The Australian Securities and Investments Commission (ASIC) has been allocated $10 million over four years, along with $1.9 million annually, to investigate and take enforcement actions against market participants engaging in greenwashing and other sustainability-related financial misconduct.
Green Bonds: Starting from 2024-25, $5.3 million over four years and $1.2 million annually have been allocated to the Treasury and the Australian Prudential Regulation Authority (APRA) to implement the sustainable finance framework. This includes issuing green bonds, enhancing data quality, and participating in the development of international regulatory regimes related to sustainable finance.
Labelling Regime: ASIC and the Treasury have been provided with $1.2 million to consult on designing a labelling regime. This regime aims to regulate the use of sustainability labels on retail investment products.
This year, the Government unveiled Australia’s first national strategy explicitly focused on achieving gender equality. "Working for Women: A Strategy for Gender Equality" (Working for Women) represents a decade-long commitment to advancing gender equality.
The Women’s Budget Statement now serves as a reporting mechanism for Working for Women. Starting with this Budget, it will detail the Government’s investments in implementing the strategy.
The 2024–25 Women’s Budget Statement highlights five key priorities, aligning with the focus areas of Working for Women:
Key measures announced in the Federal Budget include:
Over the next five years starting from 2023-24, a total of $39.9 million will be allocated to develop policies and capabilities that ensure the safe and responsible adoption of artificial intelligence (AI) technology. This funding includes:
Additionally, the Digital Transformation Agency will formulate and implement policies to position the government as a leading example in the use of AI, utilising existing resources to cover costs.
Export Finance Australia has allocated $466.4 million in equity and loans from the National Interest Account to PsiQuantum Pty Ltd. This funding aims to support the construction and operation of quantum computing facilities, along with associated investments in industry and research development in Brisbane. This initiative is part of a collaborative investment with the Queensland Government.
Additionally, $27.7 million over 11 years from 2023–24 will be provided to the Department of Finance, the Department of Foreign Affairs and Trade, the Department of Industry, Science and Resources, and the Department of the Treasury to manage and oversee this investment. Due to commercial sensitivities, the financial details of this financing package are not for publication (nfp).
Several previously announced tax and superannuation policy decisions are currently pending approval in Parliament, including:
Policy decisions currently in the consultation phase include:
Additionally, the Government has announced the discontinuation of the Modernising Business Registers Program.
The Trekk Advisory team is here for you, ready to help you make the most of the Budget's opportunities or to navigate any risks. Remember, the details matter, so don't hesitate to reach out if you need our support.
| Budget measures | Application date |
| INDIVIDUALS | |
| Tax cuts have been legislated for all 13.6 million Australian taxpayerss | 2024–25 and later income years |
| Increasing the Medicare levy low income threshold | From 1 July 2023 |
| Indexation on HELP debt to be capped to the lower of either the CPI or the WPI. | 1 June 2023 |
| BUSINESS | |
| Instant asset write-off threshold temporarily increased to $20,000. | From 1 July 2024 until 30 June 2025 |
| Two time‑limited tax incentives to invest in new industries: - Critical Minerals Production Tax Incentive to support downstream refining and processing of Australia’s 31 critical minerals to improve supply chain resilience Hydrogen Production Tax Incentive to producers of renewable hydrogen to support the growth of a competitive hydrogen industry. |
2027–28 to the 2040–41 income years |
| Extension and expansion of the Energy Bill Relief Fund | Funding for three years from 1 July 2024 |
| All households will have $300 credit automatically applied to their electricity bills and around one million small businesses will receive $325 off their bills over 2024–25. | From 1 July 2024 |
| Funding to support small business by: - Improving payment times to small businesses - Supporting mental health and financial wellbeing of small business owners -Ensuring confidence in the franchising sector - Providing small business with better access to justice |
Funding for four years from 2024–25 |
| Proposed changes to the Producer Tax Offset to remove: - The minimum length requirements for content - The above-the-line cap of 20% of total qualifying production expenditure. |
2025–26 income year |
| TAX EXEMPT ENTITIES | |
| Extension of transitional reporting for charities and updates to specifically listed DGRs | Various |
| INTERNATIONAL | |
| Strengthen the foreign resident CGT regime by: - Clarifying and broadening the types of assets on which foreign residents are subject to CGT - Amending the point-in-time principal asset test to a 365-day testing period - Requiring foreign residents disposing of shares and other membership interests exceeding $20 million in value to notify the ATO, prior to the transaction being executed. |
CGT events commencing on or after 1 July 2025 |
| SUPERANNUATION | |
| The Government will pay superannuation on Commonwealth government-funded PPL | Births and adoptions on or after 1 July 2025 |
| Funding to support the progression of the Government’s workplace relations agenda, including: - Pursuing unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024 - Supporting workplaces to implement policy changes such as the introduction of payday superannuation. |
Funding for four years from 2024–25 |
| Funding to support the delivery of Government priorities in the Finance and Treasury portfolio including: - Implement the 2023–24 Budget measure Better Targeted Superannuation Concessions for members of the Commonwealth defined benefit superannuation schemes - SuperStream Gateway Network Governance Body |
Funding over four years from 2024-25 |
| COMPLIANCE | |
| Extend the Tax Avoidance Taskforce | Funding over two years from 1 July 2026 |
| Extend the Personal Income Tax Compliance Program | Funding for one year from 1 July 2027 |
| Extend the Shadow Economy Compliance Program | Funding over two years from 1 July 2026 |
| ATO funding to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems | Funding over four years from 1 July 2024 |
| Funding for the ATO for various matters including: - Requirements of existing and new child care providers (relating to the Child Care Subsidy Program) - Improving the Government’s Digital ID, myGovID and other systems - Data-matching pilot between the Department of Home Affairs and the ATO - Overseeing / operating the secure eInvoicing network |
Various |
| OTHER MEASURES | |
| Funding to strengthen Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, to enhance Australia’s ability to detect and disrupt illicit financing. | Funding over four years from 2024–25 |
| Women’s Budget Statement — various measures that focus on four priorities | Various |
| Funding to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology. | Funding over four years from 2024–25 |
| Funding to implement a social security means test treatment for the military invalidity payments affected by the Federal Court’s decision in FCT v Douglas [2020] FCAFC 220. | Funding over five years from 2023–24 |
| Funding to deliver key aged care reforms and to continue to implement recommendations from the Royal Commission into Aged Care Quality and Safety. | Funding over five years 2023–24 |
| New Aged Care Act — deferred commencement date | 1 July 2025 |
| Social security deeming rates will freeze at their current levels | Until 30 June 2025 |
| Increased flexibility for recipients of Carer Payment —the existing 25 hour per week participation limit will be amended to 100 hours over four weeks. | From 20 March 2025 |
| Commonwealth Rent Assistance maximum rates to be increased by 10% | 20 September 2024 |
| Eligibility for the existing higher rate of JobSeeker payments has been extended | 20 September 2024 |
| GENERAL | |
| Amendments to previously announced measures: - Australian plantation forestry entities are exempt from the new earnings-based test, thin capitalisation rules - Giving the Commissioner a discretion not to use a taxpayer’s refund to offset old tax debts - where the old tax debt was put on hold before 1 January 2017 - Extending income tax exemption to World Rugby and/or related entities in relation to income from Rugby World Cup events for the 2023–24 to 2030–31 income years (incl.) |
|
| Deferring the start date for Tax Integrity — expanding the general anti-avoidance rule in the income tax law | Income years starting on or after the day the amending legislation receives Royal Assent |
| Changing the start dates for certain components of the Streamlining excise administration for fuel and alcohol package | The day after Royal Assent |
| Measures not proceeding: - Denying deductions for payments relating to intangibles held in low- or no-tax jurisdictions measure — announced in the 2022–23 October. - Previous Government’s 2019 –20 Budget measure Black Economy – strengthening the Australian Business Number system. |
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The information provided in the Budget 2024-25 Updates is intended to serve as a resource, to be used alongside professional expertise and judgement. Responsibility for the application of the Budget 2024-25 Update, including any direct or indirect outcomes resulting from decisions made based on this update, falls to the user. Trekk Advisory Services Pty Ltd, its directors, authors, and anyone else involved in creating and distributing this guide, categorically deny any liability for losses or damages of any kind, whether from contract, tort, or otherwise, arising from the use of the Budget 2024-25 Update or reliance on any information contained within this guide.