The Federal Government has released its final Federal Budget before the Federal election later this year. With this election in the near future, the budget did not contain many additional or significant measures for taxpayers and/or small businesses.

A summary of some relevant measures are: 

• A proposed cutting of the low income tax rate from 16% now to 15% in the 2027 financial year and 14% in the 2028 tax year. This will generate savings of up to $268 in the 2027 year and $536 in the 2028 year compared to the tax currently paid

• An increase in the Medicare levy low-income thresholds which is the level of income at which a compulsory Medicare levy is paid. For single individual, the threshold increases from $26,000 in 2024 to $27,222 in 2025.

• The Government proposes to reduce all outstanding HELP debts by 20% in addition to the recent indexation reforms. There is also a proposed increase in the income required before any compulsory HELP repayments with the minimum income proposed to increase from $54,435 in 2025 financial year to $67,000 in the 2026 financial year.

• The other important measure was made by omission – there was no indication the instant asset write off of $20,000 for small businesses will be extended. At this stage, there is nothing passed for the 2025 year although it was proposed in the previous year’s budget and as such any asset above $1,000 purchased after 1 July 2024 needs to be capitalised and depreciated.

If you have any queries or we can assist in any way, please do not hesitate to contact us.