Budget surplus of $4.2 billion forecasted for 2022-23
Underlying cash deficit of $13.9 billion forecasted for 2023-24
(Since October, tax receipts have been revised up by $67.2 billion across 2022-23 and 2023-24)
Gross debt is estimated to reach a peak of 36.5 per cent of GDP in 2025-26.
Real GDP growth is expected to be 3¼ per cent in 2022-23 (Nominal GDP is forecast to grow by 10¼ per cent in 2022-23)
Real GDP growth is expected to be 1½ per cent in 2023-24
Real GDP growth is expected to rise to 2¼ per cent in 2024-25.
Inflation is expected to fall to 3¼ per cent in 2023-24
Inflation is expected to return to target band (2 – 3 per cent) in 2024-25.
4¼ per cent in 2023-24
4½ per cent in 2024-25.
The Treasurer delivered the Federal Budget on Tuesday 9 May 2023. Below are the Budget measures.
Medicare levy low-income threshold to be increased
The threshold for singles will be increased from $23,365 to $24,276. The family threshold will be increased from $39,402 to $40,939. For single seniors and pensioners, the threshold will be increased from $36,925 to $38,365. The family threshold for seniors and pensioners will be increased from $51,401 to $53,406. For each dependent child or student, the family income thresholds will increase by a further $3,760 instead of the previous amount of $3,619.
No change to personal tax rates for 2023-24
The personal tax rates and income threshold for 2023-24 (remained unchanged since 2021-22):
| Income threshold | Tax rate % |
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 19% on amounts over $18,200 |
| $45,001 – $120,000 | $5,092 + 32.5% on amounts over $45,000 |
| $120,001 – $180,000 | $29,467 + 37% on amounts over $120,000 |
| $180,000 + | $51,667 + 45% on amounts over $180,000 |
There is no extension to the Low and middle income tax offset (LMITO) beyond the 2021-22 income year. As a result, low and middle income earners may see their refundable tax offset reduced by up to $1,500 in the 2022-23 income year when compared to the 2021-22 income year.
There was also no announcement regarding further personal income tax cuts that are set to commence on 1 July 2024 (Stage 3). The personal tax rates and income threshold from 2024-25 income year:
| Income threshold | Tax rate % |
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 19% on amounts over $18,200 |
| $45,001 – $200,000 | $5,092 + 30% on amounts over $45,000 |
| $200,000 + | $51,592 + 45% on amounts over $180,000 |
There were no major changes announced to the existing superannuation system. The Additional tax on individuals with a total superannuation balance exceeding $3 million was previously announced.
Pension drawdowns
There is no extension of the reduction of minimum pension drawdowns beyond 30 June 2023. The minimum annual payment amount for superannuation will return to the normal factor from 2023-24 year. If you SMSF is paying pension, review your fund's cash flow to ensure that it is sufficient to meet the minimum pension drawdown amount. SMSF not paying at least the minimum pension drawdown amount will forego tax concessions (Exempt current pension income (ECPI)).
The minimum pension factor are:
| Age (on 1 July or commencement) | Normal Minimum pension % |
| Under age 65 | 4% |
| 65 – 74 | 5% |
| 75 – 79 | 6% |
| 80 – 84 | 7% |
| 85 – 89 | 9% |
| 90 – 94 | 11% |
| Age 95 and over | 14% |
Non-arm’s length income (NALI) provisions
The NALI provisions are amended to apply only to income of SMSFs and small APRA regulated funds that are taxable as NALI to twice the level of a general expense. Additionally, fund income taxable as NALI will exclude contributions. Applicable to expenditure from the 2018-19 income year.
Large APRA regulated funds are exempt from the NALI provisions for both general and specific expenses of the fund.
Additional tax on individuals with a total superannuation balance exceeding $3 million
As previously announced, from 1 July 2025, additional tax will apply on individuals with a total superannuation balance exceeding $3 million.
It will add an additional 15 per cent tax for earnings corresponding to the proportion of an individual's total superannuation balance that is greater than $3 million.
The measure is expected to raise $950 million in 2025-26 and 2026-27.
The Budget did not provide any further details.
Superannuation Guarantee (SG) compliance
From 1 July 2026, employers will be required to pay their employees’ SG entitlements on the same day that they pay salary and wages.
In the Budget, the Government is tripling the incentive paid to doctors to bulk bill consultations.
This incentive is paid on top of the standard Medicare benefit when doctors bulk bill children under 16, pensioners and other Commonwealth concession card holders (more than 11.6 million people).
This measure is to address the sharp decline in bulk billing over the past few years.
The Government will provide Australian households and businesses by providing targeted energy bill relief to reduce the impact of rising energy prices.
Small business (annual turnover of less than $10 million) measures
The Government will amend the tax law to set the GDP adjustment factor for pay as you go (PAYG) and GST instalments at 6 per cent for the 2023–24 income year, a reduction from 12 per cent under the statutory formula.
The Government is supporting small businesses with temporary $20,000 instant asset write-off that allows small businesses to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.
Small business energy incentive
Small and medium businesses, with aggregated annual turnover of less than $50 million, will be able to deduct an additional 20 per cent of the cost of eligible depreciating assets that support electrification and more efficient use of energy (e.g. energy-efficient fridges, electric heating or cooling systems). Up to $100,000 of total expenditure will be eligible for the Small Business Energy Incentive, with the maximum bonus deduction being $20,000. Eligible assets will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. Eligible upgrades will also need to be made in this period.
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