Legislation in limbo
The Australian Parliament squeezed through numerous Bills at the tail end of 2024, but some key changes remain in limbo, leaving businesses and individuals in a state of uncertainty.
$3 million super tax
The proposed 30% tax on earnings within superannuation accounts holding more than $3 million is one of the big-ticket items still hanging in the balance. Initially slated to start on 1 July 2025, the Bill enabling this tax stalled in the Senate. If it doesn’t pass before the upcoming Federal election, it may fall by the wayside or be reviewed by the next government.
Instant asset write-off for small business
There was hope for small businesses with the proposed extension of the $20,000 instant asset write-off for another year. However, this concession was removed during the 2024 Parliamentary scramble. Without it, small businesses may face uncertainty when budgeting for asset purchases, as the threshold reverts to $1,000.
Superannuation reforms
Super Guarantee rate climbing to 12%
1 July 2025 marks a significant change in how Australians prepare for retirement, as the Superannuation Guarantee (SG) rate will rise from 11.5% to 12%. For employees, this means a larger portion of their earnings will go towards their future, but for employers, it could mean slightly higher payroll costs.
Super added to Paid Parental Leave
A win for families! From 1 July 2025, parents receiving Paid Parental Leave (PPL) payments will gain superannuation contributions too. This reform ensures that parents taking time off work to care for their new arrivals won’t miss out on growing their retirement savings. With the SG rate set at 12%, parents will see an additional boost to their super from PPL payments.
Fuel-efficient vehicles
Changes are coming for car manufacturers too, with new CO2 emission standards starting on 1 January 2025. Vehicle suppliers will need to meet average emissions targets across their fleets, encouraging the availability and sale of more fuel-efficient or zero-emission cars.
For car buyers, this opens opportunities to access greener, more economical vehicles over time. However, it’s unclear if these changes will influence vehicle prices in the short term.
Criminalising wage theft
Employers, take note! From 1 January 2025, intentional underpayment of wages or super will be a criminal offence in Australia. Companies found guilty of wage theft will face significant penalties, including fines of up to three times the amount underpaid or $7.825 million.
This reform places a clear focus on protecting employee rights and ensuring fair pay across industries. Employers should review payroll practices now to avoid potential legal and financial pitfalls once the reform takes effect.
Phasing out cheques
The humble cheque is approaching retirement. The Government has revealed plans to phase out cheque usage, with no new cheques to be issued after 30 June 2028 and acceptance to cease by 30 September 2029.
Although cheque use has declined dramatically in recent years, this transition will mean anyone relying on cheques needs to shift to electronic or other payment methods. Importantly, businesses and individuals in remote or rural areas, where digital access can be a challenge, may feel the impact.
How to prepare for these changes
With a mix of reforms on the horizon, now is a good time to assess how these changes might impact you or your business. For employers, reviewing payroll compliance and preparing for increased SG rates is essential. Meanwhile, small businesses may need to plan asset investments carefully without the instant asset write-off in place.
If you’re unsure where to start, the team at LEAD Advisory Group can help you understand these reforms and their implications. From navigating legislative changes to planning for financial stability, we’re here to support you.
Want to make sure you’re ready for 2025? Contact us today to discuss your financial goals and strategies.
Here’s to a successful and well-prepared 2025!
