2024-25 Federal Budget

On Tuesday 14th May, the Treasurer, Jim Chalmers, unveiled a suite of measures aimed at easing the financial strain on Australians, including relief on energy bills and assistance with rent, in an effort to tackle the rising cost of living and inflation. These initiatives come as the economy is projected to slip into budget deficits starting from 2024-25.

Key tax announcements:

  • Stage 3 personal tax cuts will come into effect from 1 July 2024, resulting in an average annual tax reduction of $1,888 (equivalent to $36 per week).
  • The instant asset write-off for small businesses is extended until 30 June 2025, allowing them to claim deductions for assets up to $20,000.
  • Tax incentives will be provided for the production of Critical Minerals and Hydrogen, spanning from 2027-28 to 2040-41, aimed at supporting producers in the renewable hydrogen sector and the downstream refining and processing of Australia’s 31 critical minerals.
  • Foreign resident CGT rules will undergo clarification and expansion, with changes to the principal asset test and mandatory notification requirements for transactions exceeding $20 million.
  • Low-income thresholds for the Medicare levy will be raised for the fiscal year 2023-24.
  • The personal income tax compliance program will be extended for an additional year from 1 July 2027, targeting issues such as overclaiming deductions and incorrect income reporting.
  • The previously proposed 2022-23 Budget measure regarding intangible assets and significant global entities (SGEs) is scrapped, with a new provision set to commence from 1 July 2026.


  • Various changes to existing measures include adjustments to anti-avoidance start dates, exemptions for forestry entities from new earnings-based rules, and flexibility for the Commissioner regarding the use of taxpayer refunds to offset old tax debts.
  • The reporting period for BAS notifications will be extended from 14 to 30 days.
  • Transitional reporting arrangements for charities will be prolonged for an additional 5 years.
  • The ATO Shadow Economy Compliance Program will be extended for 2 more years.
  • Additional funding will be allocated to the Australian Taxation Office Counter Fraud Strategy to enhance tax and superannuation compliance.
  • Social security deeming rates will remain frozen until 30 June 2025.

Superannuation Measures:

  • Super contributions on Government Paid Parental Leave (PPL) for births and adoptions occurring on or after 1 July 2025.
  • Funding to improve the handling of unpaid superannuation in bankruptcy and liquidations starting from 1 July 2024.
  • Funding for the implementation of measures regarding super account balances exceeding $3 million, particularly within public sector schemes.

Additionally, there are provisions for:

  • Additional support for the Gateway Network Governance Body.
  • Further details required for early retirement incentives to employers.
  • Examination of the impact of the Douglas decision on Social Security Means Testing.
  • Recalibration of the Fair Entitlements Guarantee Recovery Program to address unpaid superannuation.

Overall, the 2024-2025 Federal Budget aims to alleviate immediate financial pressures on households and businesses in light of anticipated economic challenges ahead.

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