Australia

Existing tax rate cuts for individuals

The already legislated ‘stage three’ tax cuts for individuals are currently set to continue, delivering further tax relief in FY24-25. The ‘stage three’ tax cuts are estimated to reduce the marginal rate to 30% or less for around 95% of all individual taxpayers.

Cessation of Low and Middle Income Tax Offset

The Low and Middle Income Tax Offset (LMITO) of up to $1,500 ceased on 30 June 2022, in accordance with the announcement made in the previous Federal Budget.

The LMITO was a measure introduced in response to the COVID-19 global pandemic, and was available to individuals with taxable income between $48,000 and $126,000.

Digital currencies

Legislation will be introduced to clarify that digital currencies (such as Bitcoin) will not be regarded as a foreign currency for Australian income tax purposes unless they are issued by a sovereign government. This legislation will apply retrospectively from 1 July 2021, and is consistent with the ATO’s current treatment of digital currencies.

The income tax amendments will ensure that taxpayers who hold cryptocurrencies and other digital assets must continue to treat each “coin” or “asset” as an individual asset for tax purposes.

Paid parental leave

The Federal Government has announced the biggest expansion of the Paid Parental Leave (PPL) scheme since 2011, with parental leave pay increasing from 18 to 26 weeks by FY26-27.

Flexibility under the scheme will also be increased with both parents being able to take leave concurrently, or by allowing for periods of work in between leave periods.

To encourage both parents to access the reformed PPL scheme, there will be a, yet to be determined, ‘use it or lose it’ portion for each parent.

Eligibility for the PPL scheme will be expanded through the introduction of a $350,000 family income test which families can be assessed under (if they do not meet the individual income test of $150,000 of adjusted taxable income in the financial year prior to the date of birth or adoption).

Related budget analysis

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