Australian Federal Treasurer Jim Chalmers handed down his inaugural budget on Tuesday 18 October.
It has been widely speculated that Chalmers has taken the easy road and played it extremely safe in what has been dubbed, a very vanilla budget.
However, Chalmers was not without his economic challenges. A low unemployment rate, strong company balance sheets, rising energy and fuel prices, and floods devastating food crops, have all contributed to the highest rate of inflation since the 1980s.
It appears this Budget is committed to getting the short term inflation problem under control with no provisions for big fiscal stimulus measures. The main areas of focus include support for those with children, homebuyers and social security recipients, and maintaining pre-election promises. Here we look at some of the main Budget items.
Expanding eligibility to super downsizer measures
Labor has reconfirmed their commitment to expand the eligibility to super downsizer contributions by reducing the age at which you can contribute from 60 to 55. This measure will take effect from the first quarter after the Budget receives Royal Assent, expected to be 1 January 2023.
Reducing assessment of former home proceeds
If you are receiving social security benefits and sell your home, the temporary assets test exemption of those proceeds is to be extended from 12 months to 24 months. Further, the proceeds will only be deemed to earn a return equal to the lower deeming rate (currently 0.25% per annum).
Increase to Work Bonus
Centrelink pensioners and veterans over service pension age are expected to receive a one-off work bonus credit of $4,000. This means you will now be able to earn up to $11,800 this financial year without it reducing your entitlement.
Paid parental leave increases
From 1 July 2024 the maximum period of leave under the Paid Parental Leave Scheme will increase by two weeks each year – reaching a maximum of 26 weeks by 1 July 2026. In addition, from 1 July 2023 both parents will be able to access leave at the same time or enter into more flexible arrangements than currently available. The paid parental leave income test will also be increased to $350,000 of family income.
Increase to income threshold for Commonwealth Seniors Health Card (CSHCC)
As part of the Budget, Labor has committed to increasing the income thresholds for the CSHCC to $90,000 for singles and $144,000 combined for couples.
Deeming rate freeze
At a time when interest rates are rising, Labor has committed to keeping social security deeming rates on hold at their current levels until 30 June 2024.
Persona income tax
Another pre-election promise Labor kept was the stage three tax cuts which were introduced in the 2021/22 Budget. These tax cuts are outlined below and are legislated to take effect from 1 July 2024.
| Tax rates | Current personal tax rates | Proposed personal tax rates |
| 0% | $0 to $18,200 | $0 to $18,200 |
| 19% | $18,201 to $45,000 | $18,201 to $45,000 |
| 30% | – | $45,001 to $200,000 |
| 32.5% | $45,001 to $120,000 | – |
| 37% | $120,001 to $180,000 | – |
| 45% | $180,001 and over | $200,001 and over |
The measures announced as part of the 2022/ 2023 Budget are subject to Royal Assent and are not yet Law. However, get a head start and see how these measures benefit you by talking to Elevate Wealth.
The information in this document is factual in nature. It reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue, and may be subject to change. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Please seek personal advice prior to acting on this information.
