Tax and Immigration
Australia | 2024-25 Federal Budget insights
Summary
The Albanese Government handed down its Federal Budget on Tuesday 14 May 2024 focusing on tackling inflation and addressing cost of living pressures. Similar to last year, many of the measures affecting the workforce had already been announced, resulting in minimal surprises in the Budget.
For workforce tax and payroll, the big ticket item from the Budget is the reduction to personal income tax rates. Every taxpayer will receive a tax cut, including mobile employees – regardless of tax residency. These rates were entered into law in early March 2024, so no new announcements here. Payroll teams are breathing a sigh of relief that this Budget has left things relatively untouched as they head into their busiest time of the year.
In back to back years, immigration has featured prominently with a number of measures announced in the Budget to support the Migration reform strategy, including the introduction of a new National Innovation visa and the abolition of the Business Innovation and Investment Program. Whilst net overseas migration will significantly reduce, impacting international students, the Government’s commitment to skilled migration is clear.
The Government also continues its focus on compliance and monitoring measures across both tax and migration.
The detail
Workforce Tax and Payroll
Reduction in tax rates
Previously announced and legislated individual income tax cuts come into effect from 1 July 2024:
| 2023 – 2024 | From 1 July 2024 | ||
| Tax rate | Income band | Tax rate | Income band |
| 0% | 0 – 18,200 | 0% | 0 – 18,200 |
| 19% | 18,201 – 45,000 | 16% | 18,201 – 45,000 |
| 32.5% | 45,001 – 120,000 | 30% | 45,001 – 135,000 |
| 37% | 120,001 – 180,000 | 37% | 135,001 – 190,000 |
| 45% | 180,001 + | 45% | 190,001 + |
Superannuation Guarantee
The budget didn’t include any surprise Superannuation Guarantee announcements, nor additional details regarding proposed plans for Pay Day Super.
As a reminder, from 1 July 2024 the Superannuation Guarantee contribution rate increases by 0.5% to 11.5%, with the Maximum Contribution Base increasing to $65,070 per quarter. This means for FY25, the maximum mandatory employer superannuation contribution across the year is now $29,932.20.
While the concessional contribution cap is increasing to from $27,500 to $30,000 from 1 July 2024, any taxpayers who have earnings at, or near the maximum contribution base, and who are considering additional superannuation contributions (e.g. salary sacrifice) should carefully consider the implications before proceeding.
Tax updates that may be of interest to your employees:
Immigration
Migration reform strategy
Permanent Migration Program
The 2024–25 Permanent Migration Program planning level is set at 185,000 places, with 132,200 places (around 70%) allocated to skilled visa categories. From 2025–26, the Government will extend the planning horizon for the permanent Migration Program from one year to four years to enable better cross-government planning in the future.
The Government is aiming to halve Net Overseas Migration (net population impact through migration) from 528,000 in 2022-2023 to 260,000 in 2024-2025.
Australia-India Migration and Mobility Partnership Agreement
From 1 November 2024, the MATES (Mobility Arrangement for Talented Early-professionals Scheme) program will provide a mobility pathway for 3,000 Indian national graduates and early career professionals (aged 18-30 at the time of application) to come to Australia for up to two years.
Subclass 600 (Business Visitor) stream visa validity will be lengthened for Indian nationals from up to 3 years to up to 5 years.
New Migration Review body
From 2023-2024, the Government has committed to provide $1 billion over 5 years to establish and support the new Administrative Review Tribunal (ART), replacing the Administrative Appeals Tribunal, and to address court backlogs associated with high numbers of applications for judicial review of migration decisions.
International students
Regulations to be developed and implemented by the Department of Education to require universities to establish new supplies of purpose-built student accommodation to support any increase in international student enrolments over an initial international student allocation, to be set in consultation with the sector. The accommodation would be available to both domestic and international students. This could impact the pool of international student graduates entering the Australian workforce.
Government compliance and monitoring programs
Australian Taxation Office programs
Funding of $187 million will be provided to the ATO’s Counter Fraud program to detect, prevent and mitigate fraud against Australia’s tax and superannuation systems.
The Government has continued their commitment to the Tax Avoidance task force and Personal Income tax compliance programs, with a targeted focus on inappropriate deductions for rental properties.
Department of Home Affairs programs
Funding of $100 million will be provided to the Department of Home Affairs (DHA) to support performance of core functions, including immigration compliance. This supports the new Migration Amendment (Strengthening Employer Compliance) Act which will commence on 1 July 2024.
This is in addition to a data-matching pilot between DHA and the ATO of income and employment data to reduce exploitation of migrant workers and abuse of our labour market and migration system.
This shows the Government’s continued commitment to reform Australia’s migration system to drive economic prosperity and restore its integrity, including expanded use of data-matching.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Shane Smailes
Partner, Tax
Emma Wappet
Partner, Payroll
Stacey Tsui
Partner, Immigration
Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
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