We take insight here of the mainly tax changes in the Federal Budget 2024-25 announced in May 2024, in relates to the topics of Individual & Families, Superannuation & Investors, and Business & Employers.
Individuals & Families
Personal income tax cuts confirmed
| From | 1 July 2024 |
As announced before, the government has made permanent tax cuts for all Australian taxpayers starting 01 July 2024.
Compared to the earlier Stage 3 plan, these new cuts give more benefits to people with taxable incomes below $150,000.
Personal income tax rates from 1 July 2024
Resident individuals
| Tax rate | 2023-24 | 2024-25 |
| 0% | $0 – $18,200 | $0 – $18,200 |
| 16% | $18,201 – $45,000 | |
| 19% | $18,201 – $45,000 | |
| 30% | $45,001 – $135,000 | |
| 32.5% | $45,001 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Non-resident individuals
| Tax rate | 2023-24 | 2024-25 |
| 30% | $0 – $135,000 | |
| 32.5% | $0 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Working holiday markers
| Tax rate | 2023-24 | 2024-25 |
| 15% | 0 – $45,000 | 0 – $45,000 |
| 30% | $45,001 – $135,000 | |
| 32.5% | $45,001 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Medicare levy low-income thresholds increase
| From | 1 July 2023 |
Starting from 01 July 2023, the low-income thresholds for the Medicare levy will be raised for singles, families, and seniors and pensioners.
| Medicare low-income threshold | Threshold as at 30 June 2023 | Threshold from 1 July 2023 |
| Singles | $24,276 | $26,000 |
| Families | $40,939 | $43,846 |
| Single – seniors and pensioners | $38,365 | $41,089 |
| Family – seniors and pensioners | $53,406 | $57,198 |
| Family – for each dependent child or student[1] | $3,760 | $4,027 |
These adjustments reflect recent changes in the CPI, ensuring that low-income taxpayers typically remain exempt from paying the Medicare levy.
$300 energy relief for households
| From | 1 July 2024 |
Households will get a $300 credit on their energy bills, spread out in automatic payments every three months throughout 2024-25.
Eligible small businesses will also get energy relief with a $325 rebate.
This plan, costing $3.5 billion over three years starting from 2023-24, continues and grows the Energy Bill Relief Fund.
Capping indexation of HELP debts
| From | Loan accounts that existed on 1 June 2023 |
Starting from 01 June 2023, the Government will set the HELP indexation rate to be either the Consumer Price Index (CPI) or the Wage Price Index (WPI), whichever is lower. This change affects all HELP, VET Student Loans, Australian Apprenticeship Support Loans, and other student loans that were active on 01 June 2023.
By adjusting the HELP indexation from 01 June 2023, the rate will drop from:
– 7.1% to 3.2% in 2023, and
– 4.7% to about 4% in 2024.
This change helps over 3 million Australians with HELP debt after the CPI rate jumped to 7.1% last year.
A person with an average HELP debt of $26,500 will save around $1,200 on their loans this year, depending on the approval of the new law.
Estimated indexation for HELP debts
| HELP debt at 30 June 2023 | Total estimated credit for 2023 and 2024* |
| $15,000 | $670 |
| $25,000 | $1,120 |
| $30,000 | $1,345 |
| $35,000 | $1,570 |
| $40,000 | $1,795 |
| $45,000 | $2,020 |
| $50,000 | $2,245 |
| $60,000 | $2,690 |
| $100,000 | $4,485 |
| $130,000 | $5,835 |
Note: The actual credit amount will depend on personal situations, including payments made during the year. All HELP debts that were adjusted in 2023 and are set to be adjusted again on 01 June 2024, will get a credit for the indexation.
Superannuation on paid parental leave
| From | 1 July 2025 |
Starting from 01 July 2025, superannuation (retirement savings) will be included with Paid Parental Leave (PPL) payments. Eligible parents will get an extra amount equal to 12% of their PPL payments, which will be added to their superannuation fund. This is on top of the previous change that increased leave to 22 weeks. The leave will further increase to 24 weeks from July 2025 and to 26 weeks from July 2026.
Increasing commonwealth rent assistance
| From | 20 September 2024 |
Starting from 20 September 2024, the highest amount of Commonwealth rent assistance will go up by 10%.
People who get payments from Centrelink or the Department of Veterans Affairs, as well as those receiving the family tax benefit, might also get rent assistance if they pay rent or similar payments that are above a set amount every two weeks.
Right now, the highest amount they can get every two weeks is $188.20 for a single person and $177.20 for a couple together.
This change will cost $1.9 billion over five years starting from 2023-24, and $0.5 billion per year from 2028-29. It follows a 15% increase in September 2023, making the maximum rates more than 40% higher than in May 2022.
Improving aged care support
The government will spend $2.2 billion over the next five years to improve aged care and follow the recommendations from the Royal Commission into Aged Care Quality and Safety. This funding includes 24,100 new home care packages in 2024-25. They have also decided to start the new Aged Care Act on 01 July 2025. The government is currently making and considering changes to how aged care is funded based on the 2021 Royal Commission report. This might affect the costs of home care and residential care in the future. Usually, past reforms have allowed current residents and home care recipients to keep their existing benefits.
Increased flexibility for carer payment
| Date | 20 March 2025 |
Currently, to get the Centrelink Carer Payment, the caregiver must not be working, studying, or training for more than 25 hours per week. This is because they need to give constant care to the recipient.
From 20 March 2025, this 25-hour limit will change to 100 hours over four weeks. This limit will only apply to employment and won’t include time spent on study, volunteering, or travel.
Additionally:
– Carer Payment recipients who exceed this limit or take more than their allowed temporary break from care days will have their payments paused for up to six months, rather than stopped entirely.
– Recipients will also have the option to take single temporary breaks from care if they exceed the participation limit, instead of the current requirement of at least seven days.
Higher JobSeeker rate for partial capacity to work
| Date | 20 September 2024 |
Starting 20 September 2024, the Government will expand the JobSeeker payment to include single recipients who can work a bit (up to 14 hours per week).
Right now, JobSeeker payments give higher rate to people aged 55 or older who’ve been on it for nine months in a row.
| Relationship status | Maximum payment per fortnight |
| Single with no children | $762.70 |
| Single with dependent children | $816.90 |
| Single 55 or older after 9 continuous months of payments | $816.90 |
| Partnered (Each) | $698.30 |
Freezing social security deeming rates
| Date | 12 months until 30 June 2025 |
When Centrelink and the Department of Veterans Affairs calculate payments, instead of looking at the actual income from your investments like bank accounts, term deposits, shares, and managed funds, they assume a fixed rate of return based on the total value of these investments. The Government plans to keep these fixed rates (shown below) unchanged until 1 July 2025.
| Deeming rate | Single | Pensioner Couple |
| 0.25% | Up to $60,400 | Up to $100,200 |
| 2.25% | Amounts over $60,400 | Amounts over $100,200 |
Pharmaceutical Benefits Scheme co-payments
| From | 1 January 2024 |
The Government will keep medicine prices low by stopping some price increases:
– The cost you pay for PBS medicines won’t go up from 1st of January 2025 to 31st of December 2025. After that, it will start going up again on 01 January 2026.
– If you have a concession card, the cost you pay for PBS medicines won’t go up from 1st of January 2025 to 31st of December 2029. After that, it will start to increase on 1 January 2030.
Also, the $1 discount on patient co-payments will be reduced each year until it’s gone.
Starting 1 January 2024, you may pay up to $31.60 for most PBS medicines, or $7.70 if you have a concession card. The Australian Government pays the rest, except for brand premiums and certain other charges.
Federal, state and territory governments focus on housing
Housing initiatives focus on three main areas:
1. Private Housing Development: The government aims to build 1.2 million homes by the end of the decade. The 2023-24 Budget introduced new measures to encourage investment in housing projects, especially for affordable rental homes. However, legislation needed to enable these incentives has just been released, which is crucial for certainty and large-scale investment.
2. Support for First Home Buyers: The 2023-24 Budget prioritizes helping first home buyers with a $5.5 billion funding over ten years through the Help to Buy scheme. No new incentives have been announced since then.
3. Crisis and Social Housing Support: The government allocated $1 billion towards crisis and transitional housing for vulnerable groups like women, children fleeing domestic violence, and youth. Additionally, Commonwealth Rent Assistance was increased by 15% in the 2023-24 Budget.
New measures include:
– Providing $1 billion to states and territories for building infrastructure like roads, sewers, and energy for new housing.
– Introducing a new $9.3 billion National Agreement on Social Housing and Homelessness over five years. This includes doubling Commonwealth funding for homelessness to $400 million annually, with matching contributions from states and territories.
Domestic violence
| Date | From mid-2025 |
As mentioned before, the Government has promised nearly $1 billion over 5 years to make the Leaving Violence Program permanent. This program helps people escaping violence by providing them with financial support, safety checks, and referrals to get help. Those who qualify can receive up to $5,000 in financial aid, along with referrals, risk assessments, and safety planning.
Superannuation & Investors
Expanding CGT regime for foreign residents
| Date | CGT events commencing on or after 1 July 2025 |
Here’s a simpler version:
The rules for how foreign residents are taxed on capital gains will be changed to:
– Clearing up and expanding the kinds of assets that foreign residents must pay capital gains tax on.
– Changing the test for the main asset from a single point in time to a period of 365 days.
– Requiring foreign residents to tell the ATO before they sell shares or other ownership rights worth more than $20 million.
Currently, foreign residents must pay capital gains tax when they sell property in Australia that counts as ‘taxable Australian property’ (TAP). These rules make sure that people who don’t live in Australia pay Australian tax when they sell property that’s closely linked to Australian land and used in Australian business.
Shares in a company and parts of a trust can be TAP if the taxpayer and some family members own at least 10% of the business and more than 50% of the gross market value of the assets that the business owns are property in Australia and things like that.
The changes are to make sure Australia can tax foreign residents on their direct and indirect sales of property closely connected to Australian land. Similar to what Australia does with Australian residents.
The new ATO way of telling them what you’re doing will help make sure the rules about withholding tax for foreign residents are followed. You need to check that the thing you’re selling isn’t TAP.
The plan will also make sure Australia’s rules for foreign residents paying capital gains tax are more like what other countries do and what experts think is best.
The government will talk to people about how to make the changes, and they think it will make $600 million more over five years and cost $8 million more.
Business & Employers
$325 energy relief for small business
| Date | 1 July 2024 |
About one million small businesses will get a $325 discount on their energy bills from 2024 to 2025. This support will be given as a credit every three months.
Households will also get energy relief with a $300 rebate.
This measure will cost $3.5 billion over three years starting from 2023 to 2024. It expands the Energy Bill Relief Fund.
$20k Small business instant asset write-off extended
| Date | 1 July 2023 to 30 June 2025 |
Small businesses that earn less than $10 million can immediately deduct the full cost of certain assets that cost less than $20,000. This applies to assets used or ready to use between July 1, 2023, and June 30, 2025.
“Immediately deductible” means that the business can claim the entire cost of the asset as a tax deduction in the same year it was bought and used or installed.
For businesses registered for GST, the asset’s cost must be under $20,000 after subtracting any GST credits. For those not registered, it must be under $20,000 including GST.
Each asset can be written off individually, allowing a business to deduct the cost of multiple assets.
These rules apply only to assets covered by depreciation rules. Capital improvements to buildings aren’t eligible.
Assets valued at $20,000 or more can’t be immediately deducted. Instead, they can be put into a small business depreciation pool and depreciated at 15% in the first year and 30% each following year, if the business chooses simplified depreciation.
The rule preventing small businesses from re-entering simplified depreciation for 5 years if they opt-out will be suspended until June 30, 2025.
The proposed increase in the instant asset write-off from $20,000 to $30,000, extending it to medium-sized businesses, is not yet law.
The Future Made in Australia initiative
The Government has announced a big plan to make Australia a leader in renewable energy. They will spend $22.7 billion on several projects to encourage private companies to invest in industries that will help Australia move towards net zero emissions. This will secure Australia’s position in the global economy and make sure the country is ready for future challenges. The Future Made in Australia Act will set the rules for this plan, focusing on industries where Australia is strong economically, helps reduce emissions, and improves national security and economic strength in different parts of the country.
Making Australia a renewable energy ‘super power’
| Date | From 2027–28 to 2040–41 |
As part of the Future Made in Australia initiative, the Government plans to invest about $19.7 billion over ten years starting from 2024–25. This money will be used to speed up investment in key Australian industries like renewable hydrogen, green metals, low-carbon fuels, and the processing of critical minerals.
These investments include two time‑limited tax incentives to encourage new industries:
– A tax incentive for Critical Minerals Production, starting from 2027–28 to 2040–41, to support refining and processing of Australia’s 31 critical minerals. It will be valued at 10% of processing and refining costs, applicable for up to 10 years per project that will reach final investment decisions by 2030.
– A Hydrogen Production Tax Incentive, also starting from 2027–28 to 2040–41, for producers of renewable hydrogen. This will be $2 per kilogram of renewable hydrogen produced, for up to 10 years per project that will also reach final investment decisions by 2030.
These tax incentives are planned to be active from the 2027–28 to the 2040–41 financial years.
Other funding measures include:
– $10.2 million in 2024–25 for pre-feasibility studies on common-user processing facilities for critical minerals.
– $1.3 billion over ten years from 2024–25 for the Hydrogen Headstart program to support early-mover renewable hydrogen projects.
– $17.1 million over four years from 2024–25 for the 2024 National Hydrogen Strategy, including planning, social license, and safety training.
– $1.5 billion over seven years from 2027–28 for renewable energy investments by the Australian Renewable Energy Agency.
– $1.7 billion over ten years from 2024–25 for the Future Made in Australia Innovation Fund, focusing on projects in priority sectors.
– $1.4 billion over 11 years from 2023–24 to support manufacturing of clean energy technologies.
– $20.9 million over four years from 2024–25 for further consultation on incentives for low carbon liquid fuels.
– $18.1 million over six years from 2024–25 for foundational initiatives in the green metals industry.
– $11.4 million over four years from 2024–25 to fast track the Guarantee of Origin Scheme for green hydrogen and accelerate work on green metals.
These measures aim to enhance Australia’s capability in processing critical minerals, support the growth of a competitive hydrogen industry, and advance clean energy technologies.
Film producer tax offset
| Date | 2025-26 income year |
The Producer Tax Offset is a refund given for Australian spending on making Australian films, if certain conditions are met. The amount of the offset is:
- 40% of the company’s spending on a feature film made in Australia.
- 20% of the company’s spending on other films made in Australia.
The minimum time needed for the production depends on what type of production it is.
As part of the Government’s National Cultural Policy, changes will be made to the Producer Tax Offset from 2025–26. These changes will:
- Remove the minimum length rules for content.
- Remove the cap that restricts spending on certain production costs to 20% of the total.
Small business support services
| Date | Over four years from 2024–25 |
The Government plans to provide $41.7 million over four years starting from 2024–25 for several initiatives to support small businesses:
- Improve how quickly small businesses get paid, including publicly identifying slow-paying businesses.
- Support the mental health and financial wellbeing of small business owners, including extending the Small Business Debt Helpline and NewAccess for Small Business Owners program, which offers tailored, free, and private mental health support.
- Update the Franchising Code of Conduct based on the 2023 Schaper Review, with a $3 million investment to remake and improve the code. This includes promoting best practices between franchisors and franchisees and making it easier for small businesses to operate, including better access to dispute resolution.
- Provide $2.6 million to the Australian Small Business and Family Enterprise Ombudsman to help small businesses, including resolving disputes.
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