The Australian economy remains at risk with uncertainty over the Chinese economy and ongoing international conflicts. At this stage, the Reserve Bank of Australia has not ruled out further interest rate increases.
The unemployment rate remains at 3.7% and the labour market is tight. Wages grew 1.3% for the September 2023 quarter and 4.0% over the year, pushing wages to a 14-year high. High-skilled workers are particularly difficult to source, and we appear to have reached a point now where employers are unwilling to pay inflated salaries to acquire those willing to move.
Income Tax Cuts And The End Of Some Concessions
From 1 July 2024, the stage 3 tax cuts that radically simplify the personal income tax brackets come into effect. The tax cuts collapse the 32.5% and 37% tax brackets into a single 30% rate for those earning between $ 45,001 and $200,000 – this is assuming the May Federal Budget does not postpone or scrap them!
The superannuation guarantee rate will rise again on 1 July 2024 to 11.5%.
For small and medium businesses with a turnover of less than $50m, a series of concessions are set to end or reduce:
- The Skills and Training Boost ends on 30 June 2024.
- The Small Business Energy Incentive is scheduled to end on 30 June 2024, although legislation to introduce this concession still hasn’t passed through Parliament.
- The instant asset write-off for businesses with a group turnover of less than $10m is due to be reduced back to $1,000 from 1 July 2024. The cost threshold is meant to be $20,000 for the 2024 financial year, but legislation relating to this measure hasn’t passed through Parliament yet.
Worker Rights And Rewards
There have been a myriad of changes and enhancements to workplace laws across 2023 and employers can expect greater scrutiny in 2024:
- A 5.75% increase in the minimum wage to $23.23 per hour from 1 July 2023.
- New rules and a 2-year limit to some fixed-term employment contracts (no renewing).
- A landmark case that defined how to determine whether a worker is a contractor or an employee. The ATO has followed through with new rulings to ensure employers are paying the correct entitlements. Employers must assess contractors to ensure that they are classified correctly.
- Greater flexibility for unpaid parental leave.
If you want to further understand how these influences will affect your business in 2024, contact our Walker Hill Accounting team today! support@walkerhill.com.au.
