The Australian Federal Government delivered their 2023 Budget last night and there were some significant announcements for Australian organisations. Here are the key highlights:
The 2023 Budget delivered a small $4.2 billion surplus this financial year, driven by strong employment, better than expected nonminimal wage growth and high commodity prices in Australia. The outlook for the Australian economy also noted that inflation had peaked and was slowly decreasing – sitting at 7 per cent in the March quarter from a high of 7.8 per cent in the three months to December last year.
The Federal Government announced that it will change the Petroleum Resource Rent Tax (PRRT) to cap deductions – helping to collect $2.4 billion over the next 4 years. The key reform in these changes will be capping the income from an LNG venture that can be offset by deductions at 90 per cent – meaning projects are eligible to pay PRRT on 10 per cent of their upstream revenues even if they have not offset their previous investment.
The Budget has allocated an additional $4 billion for renewable energy, including $2 billion to be invested in a new Hydrogen Headstart program. The program is expected to be run as a credit per kilogram on the price of production, in addition to supporting the development of shared industrial infrastructure in prospective regions such as Wollongong, Gladstone or Whyalla.
Australia’s National Disability Insurance Scheme (NDIS) is forecasted to grow 10.4 per cent over the next decade – down from the 13.8 per cent forecast in the October 2022 budget. In an effort to make the program sustainable in the long-term, the Government will aim to cap the growth rate at 8 per cent per year.
For small businesses with an annual turnover below $10 million, a $20,000 instant asset write-off will be available from 1 July 2023 to 2024. A Small Business Energy Incentive will also be established to help 3.8 million SMEs save energy and reduce their energy bills. This bonus tax deduction will provide businesses with annual turnover of less than $50 million an additional 20 per cent deduction on spending that supports electrification and more efficient use of energy.
As we prepare for the New Financial Year ahead in the context of these broader budget and economic changes, our team remain focused on helping organisations gain the insights and visibility they need to make well-informed decisions. Our software solutions help a wide variety of industries including not-for-profits, mining companies and food and beverage manufacturers, with a focus on leading platforms such as Sage Intacct and Sage X3. Contact us today to find out how you can best prepare for the remainder of 2023 and beyond.