2023 Federal Budget Highlights for Business & Superannuation

The Federal Treasurer Jim Chalmers handed down the 2023 Federal Budget on 9 May 2023 with the focus being on helping households through the cost of living crisis.

Cost of living measures total $14.6bn, including, $3bn of energy bill relief, $3.5bn on Medicare bulk billing incentives, $4.9bn for an across-the-board Jobseeker increase and increasing rent assistance by 15%. Other areas of focus include Medicare, improving aged care services (including $11.3bn for a 15% award pay increase) and supporting the energy transition through incentives to small business for green investments

​​We have put together the key points relating to businesses and superannuation below to keep you in the loop.

Businesses

• The instant asset write-off threshold for small businesses applying the simplified depreciation rules will be $20,000 for the 2023-24 income year.
• An additional 20% deduction will be available for small and medium business expenditure supporting electrification and energy efficiency.
• FBT exemption for eligible plug-in hybrid electric cars will end from 1 April 2025.
• An increased capital works deduction rate and reduced withholding on managed investment trust (MIT) payments will apply to new build-to-rent projects.
• The clean building managed investment trust (MIT) withholding tax concession will be extended from 1 July 2025 to eligible data centres and warehouses, where construction commences after 7:30pm (AEST) on 9 May 2023.
• The start date of a measure to prevent franked distributions funded by certain capital raisings announced in the 2016-17 Mid-Year Economic and Fiscal Outlook has been postponed from 19 December 2016 to 15 September 2022.
• Deductible gift recipients list to be updated.

Superannuation

• Treasury has reduced the severity of the factor-based approach for SMSFs under the non-arm's length income (NALI) provisions. Under the new proposal, income will be taxable at twice the level of the general expense where there is a breach, instead of five times as previously proposed. 
• Fund income taxable as NALI will also exclude contributions.
• Revenue estimates for the $3 million threshold tax for super remain around $2.3 billion, suggesting that the government will proceed with its plan to tax unrealised gains. 
• Confirmation of move to payday super, instead of paying employee super quarterly.

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View the full budget and related documents here.