Federal Budget May 2023

Treasurer Jim Chalmers laid out his budget yesterday with the main focus on providing cost of living relief to Australians through power bill rebates, expanding Medicare, increasing support payments to those in need (e.g. Jobseeker payments) and continuing government investment in affordable housing.

All this, while keeping the inflation rate in check for a return to a target of 3% by 2025.

Economic growth was also expected to fall over the next 2 years, however, as the world’s economies are forecasted to slow down as a whole in the short term.

There was precious little in the way of taxation incentives announced, however. The government did pledge to continue to support small business by introducing the following:

  • Energy Price Relief Plan
    • The Australian government is intervening to limit our exposure to international energy price shocks and providing around 1 million small businesses with direct bill relief.
  • Small Business Energy Incentive
    • Businesses with annual turnovers of less than $50 million will have access to a bonus 20 percent tax deduction for eligible assets supporting electrification and more efficient use of energy, from 1 July 2023 until 30 June 2024.
    • The maximum bonus tax deduction being $20,000 per business.
  • Small business instant asset write-off
    • Businesses with an annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2023 until 30 June 2024.
  •  Improving small business Cash Flow
    • The government is halving the increase in their quarterly tax instalments for GST and income tax in the 2024 financial year. Instalments will only increase by 6% instead of 12 %.

More detailed information on what was announced can be found on the government’s budget overview fact sheet linked here.

As usual, please do not hesitate to contact your usual HMH Advisor if you have any questions at all.​