Concessions to improve the taxation of Build-To-Rent developments provide one of the few lone standout tax incentives to investment. Whilst there are a number of bespoke growth initiatives in the budget, including a $4 billion energy funding initiative and a $3.7 billion skills package, the lack of broader productivity incentives, appears to be a missed opportunity to encourage productivity growth, which is critical to the ability to increase wages into the future without inflationary repercussions.įrom a tax perspective, the budget has a number of revenue raising and compliance related measures including the expected introduction of the Global 15% minimum tax regime (Pillar Two GloBE Rules, incorporating a complimentary Domestic Minimum Tax), pre-announced changes to Australia’s Petroleum Resources Rent Tax regime, a similarly foreshadowed tax regime on earnings of over $3 million Superannuation balances and a tightening of various anti-avoidance measures. And second, a lack of broad productivity enhancing measures, especially in light of the fact that the general full expensing depreciation write off, that has had the effect of bringing forward significant investment over the last few years, expires on 30 June 2023. What the budget does lack however is first, a recognition that Australia’s large structural deficits embedded in the 2024/25 and outer years still remain disturbingly unresolved. However, it has not stopped the government delivering a compassionate budget by providing for those in the community less able to cope with the current inflationary pressures. This has significantly slowed the rate of growth in national debt resulting in a maximum gross debt to GDP ratio of 36.5% for the four-year forecasts. Admittedly, stronger than previously budgeted tax revenues from the mining sector along with record personal tax receipts from a strong economy and increased migration, have aided immensely.īut to the government’s credit, it has banked approximately 80% of the improvements in the budget and constrained forecast spending to only 0.6% a year on average to 2026/27. Given the fiscal abyss that Australia has found itself in over the last three years, a return to surplus, albeit a relatively small $4 billion one, in this year's budget is certainly something worthy of applause.
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