Australian Federal Budget insights 2024-2025

How will the Federal Budget 2024 impact your business and what challenges will it address?

Federal Budget 2024-2025

Treasurer Jim Chalmers handed down his third Federal Budget in Canberra on Tuesday 14 May 2024, highlighting the Australian Government’s plans for revenue and expenditure in 2024-25 and beyond.

The Government has positioned this year’s Budget as a responsible budget that seeks to balance competing priorities, including providing cost of living relief and responsible economic management whilst investing in a Future Made in Australia.

Compared to recent years, tax measures do not form a large part of this year’s Budget. Besides the already legislated personal tax cuts - which will apply from 1 July 2024 and are included in this Budget’s estimates - the Government has used the tax system to incentivise investment in certain areas (hydrogen production and critical minerals) under its Future Made in Australia. Small businesses continue to receive support through an additional year of the instant asset write-off for depreciating assets. Tax changes were also announced affecting multinationals.

Key changes are highlighted below, with links to our in-depth analysis.

Business and investment

  • Two new production tax incentives have been announced in order to accelerate investment in Australia’s critical minerals and hydrogen processing and production capabilities.
  • The instant asset write-off scheme for small business will be extended for another year to 30 June 2025.
  • Changes to strengthen the foreign investment framework were announced in the lead-up to the Budget.

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Global tax

  • Foreign resident capital gains tax regime to be tightened from 1 July 2025.
  • New penalties will apply from 1 July 2026 to the underpayment of royalty withholding tax for large global groups where royalty payments have been mischaracterised or undervalued.

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Personal tax and superannuation

  • All Australian individual taxpayers will receive the already legislated tax cuts from 1 July 2024.
  • Superannuation is to be paid on Paid Parental Leave scheme payments from 1 July 2025, adding to already-legislated reforms that increase the length and flexibility of the scheme.

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Other tax measures

  • Deferral of amendments to expand income tax general anti-avoidance rules to income years commencing on or after Royal Assent.
  • Continued funding and additional powers for the ATO.
  • Abolition of “nuisance” tariffs from 1 July 2024.
  • Deferral of commencement of excise streamlining measures.
  • Continued investment in the Simplified Trade System.

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The forward tax agenda

In this section of our 2024-25 Federal Budget tax analysis, we outline the forward agenda for personal and business tax, and superannuation measures yet to be enacted.

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