The Australian Federal Budget 2024: our expert commentary for accountants
What does the Federal Budget 2024 mean for the accounting industry, including accounting practices and their clients?
Our expert commentary of the Australian Federal Budget looks at the newly announced measures, key takeaways that should be focal points for accounting professionals, and how practices can support their business clients looking for advice on navigating these changes.
After you read our analysis, you’ll have a better understanding of the Australian Federal Budget 2024 and how the measures handed down will impact the accounting industry over the next financial year.
A summary of the Australian Federal Budget 2024
The Australian Federal Budget 2024 was handed down through official budget documents by Federal Treasurer Dr Jim Chalmers on Tuesday 14th May 2024, from Parliament House in Canberra.
The “no surprises” budget is the Albanese Government’s second full-year budget in a row. The financial announcements in the budget strategy firmly focused on consolidation as Labor presents its credentials for re-election.
Cost-of-living relief, tax cuts, education and skills measures, and innovations in green energy were all high priorities this year.
According to the Treasurer in the lead up to the budget, inflation was not the sole priority, despite the current economic outlook and now was “not the time for scorched earth austerity.”
Dr Chalmers told reporters in Canberra on 1st May that: “It would not be wise when people are doing it tough and when the economy is soft for us to slash and burn this budget.”
What is the accounting industry saying about the budget documents?
The Federal Budget 2024 reaction of Australia's leading professional accounting body CPA Australia is that the "2024 Federal Budget offers cost of living relief to a wide range of stakeholders and funds the government’s flagship Future Made in Australia agenda but contains little in the way of support for small business. “
“Fuel costs, power bills and various other inflationary pressures are having a hugely detrimental impact on many small businesses,” CPA Australia Chief Executive Officer, Chris Freeland AM stated in a media release.
“Small businesses – most of which already have very thin margins – desperately needed a budget that would help alleviate the cost pressures they are facing daily.
Chartered Accountants ANZ echoed this sentiment around a lack of support for small businesses, labelling the 2024 Federal Budget as: “another budget, another funding boost for the Australian Taxation Office and no substantive tax changes for small business or individuals.”
The Council of Small Business Organisations Australia agreed in their budget statement response that there was a “missed opportunity to back small business”.
In their Federal Budget 2024 Webinar, our colleagues at ChangeGPS described the Federal Budget 2024 as "boring" for accountants, with the lowest number of tax and super changes ever, and no real measures to reduce inflation for Australians.
Australia Federal Budget 2024: Key takeaways for accountants
Extension of the small business instant asset write-off
Announced in last year’s Federal Budget, smaller accounting practices and vulnerable Australian taxpayers with small businesses with an annual turnover of less than $10 million are eligible for an instant asset write-off through the Australian Taxation Office (ATO).
Initially, a COVID-stimulus measure introduced to mitigate the Australian economy during the strain of the pandemic, the Federal Budget extended the instant asset write-off threshold last year, which was followed up with an additional extension this year. The small business temporary instant asset write-off threshold will continue to be capped at $20,000.
Accounting practices and their small business clients who meet the eligibility criteria can write off multiple eligible asset costs annually as part of this Federal Budget 2024-25 measure.
A strong focus on ATO compliance activities
There was a considerable investment in ATO compliance activities announced in this year’s Federal Budget.
Some of these ATO compliance budget measures include:
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$187 million to be invested over four years from 1 July 2024 in relation to counter fraud strategies for the ATO. The Budget papers said this will strengthen the ATO’s ability to detect, prevent and mitigate fraud against the tax and superannuation systems.
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An intended extension on the ATO’s Shadow Economy Compliance Program and its Tax Avoidance Taskforce until 1 July 2026.
Combatting cybersecurity risks
The budget announced that over the next four years $67.5m will be committed to crack down on scams and cyber fraud.
The government will look to legislate a Scams Code Framework which will include mandatory codes for different industries. Digital platforms such as social media and search engines will be part of the initial targets, with $37.3m over the four years to administer and enforce the codes so that businesses in various industries, including accounting practices, can adequately address scams on their platforms and services.
This Federal Budget announcement is good news for small accounting practices due to their vast amounts of sensitive financial data, making them prime targets for cyber threats. The emerging risk of cybercrime currently costs accounting practices, with the average cost of cybercrime in Australia up 14% in 2023.
Please read our guide containing everything you need about cyber security for accounting practices.
Cutting HECS student debts
This measure gained significant attention in the lead up to this year’s budget, with the student loan indexation being capped to either the consumer price index or the wage price index, whichever is lower. This change to the loan programs is expected to cut around $3bn in student debts.
When having discussions with clients around outstanding HECS and HELP debts, accountants can inform them that this initiative will be backdated to mid-2023. This measure reverses last year’s huge 7.1% indexation hike. The average Australian with a student debt will save approximately $1,200 through this change.
Energy bill relief for households and small businesses
Your small business clients may be eligible for a spending deduction on efficient energy, with a small business energy incentive announced by the Australian Government as part of this year's Federal Budget 2024 package.
Approximately one million small businesses on small customer electricity plans on their 2024-25 bills will be eligible to receive a $325 rebate on their electricity costs, in a measure costing the Government $3.5 billion.
This cost-of-living and inflation relief measure was announced in the newly unveiled 2024-2025 Federal Budget, along with an expansion to the Energy Bill Relief Fund providing a $300 energy rebate for every Australian household, which is not means or house tested.
Extension to personal income tax compliance programs
Treasury hopes to claw back $9.1 billion in unpaid personal tax, extending tax income compliance programs originally announced in last year’s Federal Budget.
This extension aims to target the overclaiming of deductions, incorrect reporting of income and inappropriate influence from tax agents. Those avoiding GST and personal income tax are targeted through these Federal Budget tax measures.
When speaking with their clients about these key measures, accountants should educate on the risks associated with non-disclosure of personal income tax and be diligent with record keeping.
Combatting money laundering in the accounting industry
$166 million is going towards extending the anti-money laundering reporting requirements of professionals beyond financial institutions to include a range of other professions such as lawyers, real estate agents and accountants.
The consequence of this measure is that accounting professionals who fail to undertake due diligence checks or alert the attention of law enforcement agencies through suspicious transactions, could face prison time.
Australian Federal Budget 2024: In Summary
The spending measures announced during the Federal Budget 2024 are reflective of our current cost of living crisis in Australia.
Now that you have read our budget coverage, and how the measures will impact your accounting practice, and your clients, you may be considering how to enter the new financial year with a fresh start.
You may want to consider whether you have the right software for business advisory services to help your clients make sense of the Federal Government budget changes and what it means to their business.
