BUDGET BULLETIN 2023/24
In the May federal budget, the government reported a $4.2 billion surplus for 2022-23 and forecast a slowing economy and a decline in inflation.
A series of cost-of-living measures were announced along with some initiatives that have an impact on superannuation.
Employers will be required to pay super on the same day as salaries or wages from 1 July 2026. The government says the move will boost retirement balances and simplify payroll management. Treasury modelling forecasts that switching to fortnightly super from quarterly will leave a 25-year-old median income-earner about $6000, or 1.5 percent, better off at retirement.
Reduced tax concessions
The concessional tax rate for earnings on super balances over $3 million will rise to 30 percent from 15 percent. The proposed changes take effect on 1 July 2025 and are expected to generate $2.3 billion in additional revenue in the first full year of operation. Earnings on assets below the $3 million threshold will continue to be taxed at 15 percent, or zero percent if held in a retirement pension account.
Under payment of super
The Australian Taxation Office (ATO) will receive $40 million to help workers reclaim underpaid or unpaid super. This consists of $27 million for the ATO to improve data matching capabilities to identify and act on cases of superannuation guarantee underpayment by employers. The remaining $13 million will be used to consult stakeholders and co-design a new ATO compliance system to identify underpaid or unpaid super.
The ATO will receive additional funding over four years from 1 July 2023 to enable it to engage more effectively with businesses to address the growth of tax and superannuation liabilities.
Review the budget papers here.
Information for this document was sourced from the Federal Budget papers, the Australian Institute of Superannuation Trustees and media reports. The changes described in this document are subject to legislation and may be amended or cancelled before they become law.