Opposition Budget Response 2025-26

Federal Election 2025

What Peter Dutton’s Budget Reply Means for Australian Households and Businesses

As the countdown to the 2025 Federal Election begins, all eyes are on the policies shaping the economic landscape. In his Opposition Budget Reply speech on 27 March 2025, Opposition Leader Peter Dutton outlined the Coalition’s vision for Australia—one focused on reducing cost-of-living pressures, boosting home ownership, and ensuring essential services are well funded.

With the official election date set to be announced tomorrow, Dutton’s speech is more than just a political statement—it’s the Coalition’s blueprint for the nation’s future.

Four Key Bills to Set the Tone

If elected, Dutton announced that the Coalition would hit the ground running, introducing four major legislative packages when Parliament resumes:

  • Energy Price Reduction Bill – to combat rising power bills through increased domestic energy supply.

  • Lower Immigration and More Homes for Australia Bill – aimed at easing housing pressures by reducing migration and ramping up housing supply.

  • Keep Australia Safe Bill – a broad initiative expected to cover national security and law enforcement.

  • Guaranteed Funding for Health, Education and Essential Services Bill – to ensure stability and support in key service areas.

Major Policy Highlights

Here’s a closer look at some of the key announcements in Dutton’s budget reply – and what they could mean for you:

🚗 Fuel Savings for Aussie Families

In a move to ease everyday expenses, the Opposition has pledged to halve the fuel excise for 12 months, with a review at the end of the period. This would put approximately $14 a week back in the pocket of a one-car household, or $28 for families with two cars.

🏡 Helping First Home Buyers Get Ahead

Under the proposed plan, first home buyers could access up to $50,000 of their superannuation to put toward a home deposit—potentially helping thousands break into the property market faster.

🏗️ Tackling the Housing Crisis

With the housing market under pressure, the Coalition is proposing a 25% cut to migration to free up housing and ease demand. This would be supported by a national energy plan and increased domestic gas production to reduce energy costs.

🛠️ Support for Small Business and Apprentices

Small business owners could benefit from an increase in the instant asset write-off threshold to $30,000, giving them more flexibility to invest in equipment and growth. The plan also includes a target of 400,000 new apprentices, aiming to build a stronger, skilled workforce for the future.

🧠 Funding Where It Matters Most

  • $400 million will be invested in youth mental health services, addressing growing concerns around the wellbeing of young Australians.

  • $50 million in funding to food charities will support their expansion, including school breakfast programs to help children start the day right.

What’s Next?

With the official campaign period just around the corner, this budget reply marks a pivotal moment in the election race. Whether you’re a small business owner, a first home buyer, or simply feeling the pinch from rising living costs, these policies offer a glimpse into what a Coalition-led government could prioritise.

Stay tuned as the Federal Election is officially called and the political debate ramps up. We’ll continue to break down what each party’s promises mean for you.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.

Federal Budget 2025-26

On Tuesday night, 25 March 2025, Federal Treasurer Jim Chalmers handed down his fourth Federal Budget for the Labor Government.  The Treasurer says that this Budget is built on five main pillars:

  • Helping with the cost of living
  • Strengthening Medicare
  • Building more homes
  • Investing in every stage of education
  • Making our economy stronger, more productive and more resilient.

This budget marks a return to a deficit, following two consecutive years of surplus. However, running persistent surpluses can sometimes be more detrimental than maintaining modest deficits. A surplus-driven approach may be the result of underinvestment in critical areas such as public services and infrastructure, potentially hindering long-term economic growth and development.

It’s also essential to remember that governments are not businesses and do not have the same profit-driven objectives. While deficits are not inherently problematic, it is vital that these deficits are manageable.

Given the current state of global fiscal uncertainty, particularly the ongoing trade tensions under President Trump’s administration, we also may face additional economic challenges in the future.

Outlined below are some of the key budget initiatives that may directly impact our clients. As with all budgetary measures, these measures are not final until the relevant legislation has been passed by the Government. We will keep you updated on the status of any proposed measures.

Impact for individuals

✅ Cuts to individual tax rates

  • From 1 July 2026, the 16% marginal tax rate (for incomes between $18,201 – $45,000) will drop to 15%, and then to 14% from 2027.  This is a saving of $268 for all taxpayers in the first year, and $536 in the second.  Noting that the Coalition will not support the tax rate changes with the Shadow Treasurer commenting that “Seventy cents a day, in a year’s time, is not going to help address the financial stress Australian families are currently under”.

✅ Medicare Levy Relief

  • Low-income thresholds have been increased, exempting over 1 million Australians from paying the Medicare levy.

✅ Cheaper Medicines

  • PBS co-payments will drop from $31.60 to $25 from 1 January 2026, saving households over $200 million annually.  Additional subsidies for medicines like contraceptives and endometriosis treatments.

✅ Energy Bill Relief

  • Extra $1.8 billion allocated to extend energy rebates into 2025.  Eligible households receive two extra $75 quarterly rebates.

✅ Higher Education

  • HECS debts and other student loans to be reduced by 20%.  This will remove $16 billion from student loan accounts of 3 million Australians.

  • From 1 July 2025, the minimum repayment threshold to increase to $67,000 (from $54,435).

  • 100,000 free TAFE places from 2027 – aimed at tackling shortages in the construction industry and healthcare.

✅ Limiting Non-Compete Clauses

  • One in five workers are subject to non-compete clauses in their employment contracts that restrict their ability to move to a new job and are significantly suppressing wages. The Government will ban these clauses for low and middle income earners. This measure is expected to boost wages as these workers will be able to move to more productive, higher-paying positions.

Impact for businesses

The Budget contained a few measures to help small businesses:

✅ Energy Rebates Extended

  • Over 1 million small businesses to continue receiving electricity bill relief through 2025.

✅ Instant Asset Write-off 

  • Extension of the $20,000 instant asset write-off was noticeably absent from this year’s Budget.  The $20,000 threshold should extend to 30 June 2025 (with legislation currently before Parliament, but if an election is called the bill will lapse).  From 1 July 2025, without an extension, this will revert back to the legislated threshold of $1,000 for the first time in almost 10 years.  

✅ Tax System Overhaul & Compliance

  • $1.8 billion in revenue improvements from increased ATO funding to combat tax evasion and shadow economy activity.

  • Funding to crack down on illicit tobacco trade and reduce unfair market practices.

✅ Phoenixing & Fair Trading

  • New measures to tackle illegal phoenix activity, with funding to ASIC to target high-risk sectors like construction.

  • Enhanced protections from Unfair Trading Practices, including better enforcement on unfair contract terms and surcharges.

✅ Digital Upgrades

  • Funding to enhance business register systems, including linking Director ID numbers to company records.

We will keep you up-to-date with the progress of the implementation of these Budget measures.

If you would like to discuss the tax implications of the budget proposals, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.

Tax Planning for Life

Tax Planning for Life – Not Just for Year End

 

When most people think about tax planning, they think about scrambling in June to find a few quick deductions before the financial year ends.  But smart tax planning is so much more than last-minute strategies – it’s about long-term planning that supports your personal and business goals throughout your life.

Tax planning evolves with you

Your financial needs and opportunities change over time.  The right strategies for a start-up business owner are different from those of someone growing a successful business, investing in property, or preparing for retirement.  That’s why tax planning isn’t a “set and forget” process – it’s an ongoing conversation that evolves as your life and business grow.

Key times to review your tax plan

  • Starting a business – Choosing the right structure (sole trader, company, trust) can make a big difference to how much tax  you pay and your legal protection.
  • Growing wealth – Whether you’re investing in property, shares or expanding your business, you’ll want to manage tax efficiently or maximise your returns.
  • Major life changes – Marriage, children, divorce or inheritance can all have tax consequences.
  • Succession and retirement planning – Long before you plan to sell or retire, you should be considering the tax implications and ways to maximise the value you retain.

Tax planning isn’t just about saving tax

While minimising tax is important, good tax planning is really about protecting your wealth, supporting your goals, and ensuring you have the right structures in place to adapt to changing circumstances. It’s about working smarter, not just harder, so your financial affairs are aligned with your lifestyle and future plans.

Selling your business?

Hve you considered your business exit strategy?  If it involves selling your business, there may be significant tax savings available through the Capital Gains Tax (CGT) small business concessions. These concessions can be incredibly valuable but are also complex, with strict eligibility criteria and timing requirements. In some cases, selling even one day too early (or too late) can mean the difference between a tax-free sale and a hefty tax bill.

Ongoing tax planning ensures you’re well-positioned to take full advantage of these concessions when the time comes, helping you achieve the best possible tax outcome on the sale of your business.

Looking to invest?

Investment decisions also benefit greatly from proactive tax planning. Whether you’re considering buying an investment property or investing in the share market, choosing the right ownership structure is crucial. Many people default to making investments in their personal name without considering the long-term tax implications or asset protection risks.

A tailored investment structure can optimise tax outcomes, provide flexibility, and protect your assets. Strategic planning before you invest ensures your wealth is built on a solid foundation.

Need help with long-term tax planning?

If you’d like to take a more strategic approach to tax planning — one that looks at the bigger picture and helps you plan for life, not just year-end — we’re here to help.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Use it or Lose it – Carried Forward Super Contributions – FY25

Super Contributions: Use it or Lose it

If your superannuation account balance was less than $500,000 as at 30 June 2025, you have until 30 June 2025 to catch up any unused concessional superannuation contributions from 2020.

From the 2020 financial year onwards, new rules came into effect that enabled individuals with a total superannuation balance of less than $500,000 to catch up on superannuation contributions that may not have been maximised made in prior years. 

For example, in the 2020 year, the total concessional contribution cap was $25,000.  If you only made contributions of $15,000, then you have $10,000 unused from that same year.  You can carry this unused cap balance forward for up to 5 years.  After 5 years, the unused balance expires.  This means that you have until 30 June 2025 to use up any unused concessional cap from the 2020 financial year.  If you don’t use up the 2020 carried forward balance before 30 June 2025, it will be lost.

But there’s a catch: your current year contributions first go towards this year’s cap.  Once that is maxed out, any extra goes towards past years, starting from the oldest.

So, to claim your 2020 unused cap, you’ve first got to max out your 2025 contributions ($30,000).  Anything above that goes towards your unused caps from previous years, starting with 2020.

Not sure what your prior year unused caps are?  Check your myGov account or as your tax agent.

Now, before you go all in, chat with your financial planner to make sure it aligns with your retirement goals.

Remember, if you are looking to claim a personal tax deduction for superannuation contributions, you need to:

  1. Ensure the contribution is received by your superfund prior to 30 June 2025;
  2. Give your superannuation fund a “Notice of Intention to Claim a Tax Deduction” for the contributions;
  3. Receive an acknowledgement letter from your fund prior to lodging your 2025 tax return.

If you’re considering extra contributions this year, talk to your tax agent and your financial planner to figure out how much and if it fits your retirement plan.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Federal Budget 2024-25

On Tuesday night, 14 May 2024, Federal Treasurer Jim Chalmers handed down his third Federal Budget for the Labor Government.  If anything, it was quite an underwhelming budget, leaning towards higher spending particularly over the upcoming year.  While this is the second consecutive budget surplus for the Labor Government, there is a forecast $28.3 billion deficit for the next financial year.  In fact, for the four years after the current year surplus, the forecast is for a combined deficit of $122 billion.

The economic story though is all about inflation at the moment: “When will we be rid of it?”  “And how much damage has it done along the way?”

Energy bill relief – $2.6 billion – yes it makes your electricity bills cheaper today, but will this lead to upwards inflationary pressure over the longer period?

The Government indicates inflation will be under control by Christmas 2025, but many economists and perhaps, more importantly, the RBA may not agree with that.

We would still call for more broader tax reforms including reducing state based taxes like transfer duty and payroll taxes, and replacing it will greater broad based consumption taxes (like GST).

Production tax credits and critical mining projects and fast-tracked investment processes were helpful wins for the top end of town.

We’ve outlined below some of the measures that were announced in the Budget that will impact on our clients.  As with all budgetary measures, these measures are not final until the relevant legislation has been passed by the Government.  We will keep you updated on the status of any proposed measures.

Impact for individuals

Individual income tax rates

As previously announced by the Treasurer, the Stage 3 individual income tax rates were amended to provide tax relief to all taxpayers. 

The current tax rates (to 30 June 2024) are as follows:

 

From 1 July 2024, the reduced tax rates are as follows:


The tax savings for certain income levels are as follows:

 

The last table shows the difference between the tax payable for the 2024 financial year, compared to the tax payable for the 2025 financial year and how much that translates to a weekly saving.

Energy bill relief

A $300 rebate will be applied to all Australian households towards their electricity bills.  This will be a $75 credit on each quarterly electricity bill in the 2024-25 financial year.  Eligible small businesses will receive a credit of $325.

HECS

Another measure that was announced last week was the change to the HECS indexation rate.  Currently, HECS debts are indexed each year on 1 June using the Consumer Price Index (CPI).  Given the high rates of inflation, this resulted in an indexation rate of 7.1% applied to HECS debts on 1 June 2023.

The Budget announcement is to use the lower of CPI and Wage Price Index (WPI) to index HECS debts (backdated to 1 June 2023).  This means that the 7.1% CPI indexation rate used last year will be replaced with a 3.2% WPI (and a credit applied to HECS accounts to reflect the lower indexation at 1 June 2023).

It is also forecasted for the WPI to be 4% for the 1 June 2024 indexation.

Please read our article for more information about the indexation of HECS debts and whether it is beneficial to repay some or all of your debt.

Medicare Levy Low-Income Thresholds

The Medicare Levy low-income thresholds for singles, families, seniors and pensioners will also be increased from 1 July 2023.  The family income threshold will also now be increased by $4,027 per child (up from $3,760).

Rent Assistance

The Commonwealth Rent Assistance maximum rates have been increased by 10% from 20 September 2024 to address rental affordability challenges.

Paid Parental Leave

$1.1 billion was allocated in the budget towards paying superannuation on Commonwealth Funded Paid Parental Leave for births and adoptions on or after 1 July 2025.

Impact for businesses

The Budget contained a few measures to help small businesses:

Instant asset write-off threshold extended

From 1 July 2023, the instant asset write-off threshold was due to reduce to $1,000.  Last budget, this threshold was increased to $20,000 for businesses with an aggregated turnover of less than $10 million.  The increased threshold was to apply until 30 June 2024.  The announcement in this budget was to extend the $20,000 threshold to 30 June 2025.  We note that the announcement from last year’s budget (to increase the threshold to the $20,000) has still not passed by Parliament, leaving this measure uncertain as we close in on the end of the financial year.

We also note that, assets acquired for more than $20,000 can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first year and 30% thereafter.

ATO Counter-Fraud Strategy

$187 million has been allocated to the ATO Counter Fraud Strategy, including allocating funds to:

  • Identify and block suspicious activity in real time
  • Recover lost revenue from fraud
  • Counter fraud
  • Extend the period for which the ATO can withhold GST refunds (extended from 14 days to 30 days)

ATO Tax Avoidance Taskforce

The ATO Tax Avoidance Taskforce has been extended for 2 years from 1 July 2026.  The task force pursues key tax avoidance risks from multinationals, large public and private businesses and high-wealth individuals.

Foreign Resident CGT regime

The foreign resident capital gains tax (CGT) regime will be strengthened to provide greater certainty about the operation of the rules.  The amendments will apply to CGT events on or after 1 July 2025 and will:

  • Clarify and broaden the types of assets that foreign residents are subject to CGT on
  • Amend the point-in-time principal asset test to a 365-day testing period
  • Require foreign residents disposing of shares and other membership interests exceeding $20 million to notify the ATO, prior to the transaction being executed

Supporting Small Businesses

$41.7 million has been specifically allocated to supporting small businesses, as follows:

  • $25.3 million to support the Payment Times Reporting Regulator;
  • $10.8 million to extend the Small Business Debt Helpline;
  • $3 million to implement the Government’s response to the Review of the Franchising Code of Conduct;
  • $2.6 million for the Australian Small Business and Family Enterprise Ombudsman to support unrepresented small businesses to navigate business-to-business disputes through alternative dispute resolution.

We will keep you up-to-date with the progress of the implementation of these Budget measures.

If you would like to discuss the tax implications of the budget proposals, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.

Use it or Lose it – Carried Forward Super Contributions

Super Contributions: Use it or Lose it

If your superannuation account balance was less than $500,000 as at 30 June 2023, you have until 30 June 2024 to catch up any unused concessional superannuation contributions from 2019.

From the 2020 financial year onwards, new rules came into effect that enabled individuals with a total superannuation balance of less than $500,000 to catch up on superannuation contributions that may not have been maximised made in prior years. 

For example, in the 2019 year, the total concessional contribution cap was $25,000.  If you only made contributions of $15,000, then you have $10,000 unused from that same year.  You can carry this unused cap balance forward for up to 5 years.  After 5 years, the unused balance expires.  This means that you have until 30 June 2024 to use up any unused concessional cap from the 2019 financial year.  If you don’t use up the 2019 carried forward balance before 30 June 2024, it will be lost.

But there’s a catch: your current year contributions first go towards this year’s cap.  Once that is maxed out, any extra goes towards past years, starting from the oldest.

So, to claim your 2019 unused cap, you’ve first got to max out your 2024 contributions ($27,500).  Anything above that goes towards your unused caps from previous years, starting with 2019.

Not sure what your prior year unused caps are?  Check your myGov account or as your tax agent.

Now, before you go all in, chat with your financial planner to make sure it aligns with your retirement goals.

Remember, if you are looking to claim a personal tax deduction for superannuation contributions, you need to:

  1. Ensure the contribution is received by your superfund prior to 30 June;
  2. Give your superannuation fund a “Notice of Intention to Claim a Tax Deduction” for the contributions;
  3. Receive an acknowledgement letter from your fund prior to lodging your 2024 tax return.

If you’re considering extra contributions this year, talk to your tax agent and your financial planner to figure out how much and if it fits your retirement plan.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Ensuring Asset Valuations: A Vital Responsibility for SMSF Trustees

Ensuring Asset Valuations:

A Vital Responsibility for SMSF Trustees

 

If you are a trustee of a self-managed superannuation fund (SMSF), you need to ensure that your fund’s assets are reflected at market value in the annual financial statements.

Our SMSF auditor will check that the assets have been valued correctly and that the basis of the valuation is appropriate.  These valuations are also reported to the ATO on an annual basis via the tax return. 

The ATO is using the data reported in the tax returns to identify funds who have recorded the same values for assets in their annual returns for the past several years (which suggests that these assets are not reported at an appropriate market value).

There are approximately 16,500 funds who have reported the same value for certain assets for at least three income years.  This includes residential and commercial property, unlisted companies and unlisted trust investments.  Furthermore, there were no auditor contravention reports listed for these funds for potential breaches of the market valuation rules for the assets.

The ATO will be sending messages to trustees of these particular SMSFs to remind them of the obligation to report assets at market values (and the next tax return will be monitored by the ATO).

If your fund fails to meet the valuation requirements, the fund and members may be required to pay additional tax and could be liable to administrative penalties. 

What do you need to do?

If you are the trustee of an SMSF, you need to review the value of the assets that you hold.  Each year, we will request evidence from you of the market value of these assets.  Often, these values will be readily available (for example, the current price of listed shares).  Other times, the services of an independent valuer may be required to confirm the valuation.  For example, if your fund holds direct real property, you need to factor in the cost of an annual valuation into the ongoing running costs of your fund.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.

Superannuation – Concessional Cap Increases

Superannuation Caps

 

From 1 July 2024, the concessional contribution cap for superannuation is increasing to $30,000.  This will have a flow on effect to other areas of super as well:

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.

New super tax for balances over $3 million

Proposed New Tax for Superannuation Balances over $3 million

 

On 3 October 2023, the Federal Government released draft legislation proposing a 15% additional tax on earnings for individual superannuation balances that exceed $3 million.  The new measure is set to commence on 1 July 2025.

This proposed new tax will impact on individuals that have a total balance in super or more than $3 million (this is across all superannuation accounts held).

The 15% tax will be levied on the member’s account “earnings” which will be calculated as the movement between the member’s opening and closing balance for the year (after adjusting for withdrawals, contributions and other specific exclusions).  It will only apply to the proportion of an individual’s account balance that is above $3 million (so if your balance is only just over the $3 million threshold, only a small proportion of the earnings will be subject to the new tax).

This means that for individuals who have a total superannuation balance in excess of $3 million, a proportion of unrealised gains of the fund will be taxed at 15%.  This may cause a cash flow concern for the member as they will have to pay tax on gains that have not been realised (and may be held within illiquid assets).

Where there have been negative earnings, the loss can be carried forward to offset future “earnings”.  However, there is no provision in the draft legislation for the losses to be carried back to reduce prior year unrealised gains. 

As yet, there is also no provision for the $3 million threshold to be indexed.

The tax will be levied directly to the individual member (and not the superfund).  The ATO will issue an assessment to the member personally and they can elect to pay the liability personally or withdraw funds from their superfund balance to pay the liability.

We will keep you up to date on the progress of the draft legislation.  Please do not hesitate to contact us if you would like to discuss the impact of the proposals on your superannuation fund.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.

Increased Penalty Units: Implications for Taxpayers

Increased Penalty Units: Implications for Taxpayers


Under tax laws, the ATO can impose administrative penalties if you fail to meet your tax obligations.

From 1 July 2023, the base penalty unit has increased by almost 14% to $313. 

When the ATO imposes penalties, they can calculate the penalty using either:

  • a statutory formula, based on the taxpayers behaviour and the amount of tax avoided; or
  • multiples of the base penalty unit.
Examples of Tax Penalties

These are some of the examples of penalties that the ATO may impose:

  • Failing to retaining records as required (maximum 20 penalty units = $6,260)
  • Failing to register (or cancel) GST registration when required (maximum 20 penalty units = $6,260)
  • Failure to lodge a return or statement for a small entity (1 penalty unit for each 28 days late, up to 5 penalty units = $313 to $1,565)

Superannuation funds

The increase in penalty units can impact significantly on superannuation funds.  For superannuation funds, the penalty units are imposed per trustee.  Where a fund has a corporate trustee, the penalty will be imposed solely on the corporate trustee.  However, where a fund has individual trustees, the penalty will be imposed on each trustee.  Effectively doubling the penalty where the fund has two individual trustees.

This is another reason that we recommend that a superannuation fund should have a corporate trustee.

It is possible to change the trustee of your superfund to a corporate trustee.  Please contact us if you would like to discuss this further.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent.