BUDGET BULLETIN 2023/24

May 2023

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.


Highlights:

Payday super

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.

Tax integrity

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.