Treasurer Jim Chalmers has characterised the 2024-25 Federal Budget, released on 14 May, as a balanced approach comprising relief, restraint and reform. 

This Budget aims to ease some of the challenges faced by many Australians in the current economic climate through a range of targeted measures. You can read about these measures in more detail in our full Budget report.  

Key Budget announcements include:

  • Help with the cost of living: The Budget introduces initiatives designed to alleviate cost-of-living pressures. These include already legislated tax cuts, another round of energy bill rebates for all Australians, and measures to lower prescription drug prices.
  • Building more homes: The Government has allocated significant funding to construct more homes to tackle housing shortages and improve affordability.
  • Investing in tertiary education support: The Budget includes enhanced support for tertiary education with increased funding for universities, as well as expanded student housing and financial aid to make higher education more affordable. 

While the Budget focuses on alleviating household cost-of-living pressures, the business community may find it somewhat underwhelming. The focus on household relief means there are fewer specific initiatives targeting the business sector, which is also facing significant challenges.

From a tax perspective, the budget is compliance-focused, with only a few minor measures announced:

  • Extension of the instant asset write-off: The $20,000 instant asset write-off has been extended for another 12 months, providing continued support for small businesses to invest in assets.
  • Changes to the foreign resident CGT regime: This involves expanding the existing capital gains tax regime for foreign residents.
  • Expansion of ATO compliance task forces: More resources will be allocated to the ATO to enhance compliance activities.

Looking ahead

Given the limited content on business and taxation measures in the 2024-25 budget, attention is shifting to the next budget cycle. The 2025-26 budget, being an election-year budget, will hopefully offer more support for businesses, but only time will tell.

Our Federal Budget Tax and Super Report provides more details on the measures announced this year. 
 
If you have any questions about the 2024-25 Budget and what it means for you, please reach out to your Davidsons team member or contact us by completing an enquiry form, calling us on 03 5221 6399 or emailing via info@davidsons.com.au

This article was written by Director Kylie McEwan.  

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Disclaimer: The information provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.