On May 9, 2023, Treasurer Jim Chalmers presented the Australian 2023/24 Federal Budget. The budget took a cautious approach, focusing on cost of living pressures, health funding, and strengthening tax compliance. Below are four updates relevant to our GrowthMD clients:
1. Small Wins for Small Business
While the wins for small businesses in this year's budget are less impactful than in previous years, there are still some positive changes:
Small businesses with a turnover of less than $10 million can now instantly write off assets of up to $20,000 if the assets are used or installed for use between July 1, 2023, and June 30, 2024.
Small businesses can claim an additional 20% deduction up to a cap of $20,000 for depreciable assets that support energy efficiency and electrification if the assets are used or installed for use between July 1, 2023, and June 30, 2024. Examples of these assets are energy-efficient fridges and electric heating or cooling systems. This is available to businesses with a turnover of up to $50 million.
Small businesses with a turnover of less than $10 million can participate in the lodgement penalty amnesty program, which applies to unmet tax obligations due between December 1, 2019, and February 28, 2022. Lodgement of these returns between June 1, 2023, and December 31, 2023, will not trigger late lodgement penalties.
2. Increased Future ATO Compliance Activity
Revenue estimates from ATO tax compliance activity are among the largest revenue-raising items in this budget. Taxpayers should ensure their affairs are up to date and correctly managed in the event of future compliance activities. The activity funded in this budget includes:
Expanded anti-avoidance provisions to apply to the taxation of foreign residents paying low rates of tax in Australia.
A focus on GST compliance with funding for the ATO to develop more sophisticated analytical tools to identify risk.
Expanded scope of the personal income tax compliance program, particularly focused on emerging risk areas of deductions around short-term rental properties such as Airbnb.
ATO funding to deal with taxpayers with large tax debts or aged debt of more than 2 years.
3. Medicare Funding Increases
Given recent awareness campaigns on the state of General Practice and Health in Australia, this area received significant funding in the 2024 budget. Of particular interest to our GrowthMD client groups will be:
Introduction of the MyMedicare patient registration system, including a $2,000 upfront payment for registering a patient identified as a regular hospital ED user.
Increases to the Workforce Incentive Payment, making the maximum payment $130,000 per practice.
Increases to Medicare Rebates from November 2023.
Creation of a Level E MBS item for consults over 60 minutes ($184 rebate).
Tripling of the bulk billing incentive for select patient groups on select item numbers.
Increased funding of telehealth for registered MyMedicare patients.
Changes to the bulk billing incentive and patient registration funding should be carefully considered before changing your current billing and appointment policies. GrowthMD can discuss the financial impacts and analysis for your practice with you once full details become available.
4. Other Need-to-Knows
From July 1, 2026, employers will be required to pay superannuation on payday, rather than quarterly. While there is a 3-year timeline to ready our clients for this change, it should be kept on the radar and factored into future business and cash model planning.
Pay As You Go (PAYG) instalments will be increased by only 6% for the 2023/24 year, down from the 12% originally set in reference to GDP adjustment. This delivers a cash flow reprieve for business and investment-earning individuals or entities paying quarterly PAYG instalments.
The Build-To-Rent Scheme will be available for construction projects of over 50 apartments and will provide increased capital works write-off deductions and decreased withholding tax rates. This scheme will primarily benefit developers and has significant restrictions involving a 10-year ownership term and 3-year minimum lease term.
Do you have further questions on how the budget will impact you and your business? Please contact your GrowthMD accountant or call us on 07 3292 1158.