What a time to be the Treasurer!

Dr Jim Chalmers has reported the first (possibly temporary) surplus in 15 years, and he was quick to claim credit in the media (in reality, he and his Government have had little influence over that outcome, a result of high commodity prices, high taxable profits in some sectors, stronger employment growth and wages, which the Treasurer himself acknowledges).  The surplus is expected to be formally confirmed in September.

With households facing inflationary pressures and knowing there has been more than a decade of neglect in essential services and transfer payments to the vulnerable members of society, there was great pressure to spend.  But despite the Government’s attempt to suggest their cost-of-living measures will not be inflationary, high school economics suggests this will not be the case (but there is plenty of debate amongst economists on this point).  Still, there is no doubt the targeted relief was necessary and there has been a great deal of restraint shown in other areas as the Government works to secure a long-term plan to repay the COVID debt.

In counterbalance, there has been ongoing tinkering with the tax system, clawing money back where possible and reprioritising expenditure, acting as a dampener on some inflationary pressures in the economy.  Major (or even minor) systematic reform of the tax system remains wishful thinking with this Government as it was with the last!  However, there is some optimism that we will start to see broader policy discussions in the years leading up to the next election due in 2025.

Economic and budget snapshot

In just over the six months since the Treasurer released his first (mini) Budget in October 2022, there has been a remarkable improvement in the nation’s finances.  The cash balance has swung from a shortfall of $36.9 billion to a surplus of $4.2 billion, with forecast balances and debt all improving. The charts below show these improvements.

Notwithstanding the depiction of debt as a proportion of GDP in the above chart, it should not be forgotten that gross debt continues to be forecast to increase to over $1 trillion by 2025-2026, with net debt at $665.2 billion at the same time.

The Government expects real GDP growth to remain below 3% over the next four years to 2026-2027, with unemployment topping out at just over 4%.

The following chart summarises the major revenue sources and major expenses (in aggregate, not just new Budget measures) for the 2023-2024 year.

Individuals and families

No changes to tax rates 

Operative date

1 July 2022


Individuals and families


$460 million

Despite predictions by the G+T Budget Bingo gamemasters, there are no changes to tax rates:

  • The legislated stage 3 personal income tax rate cuts which are to operate from 1 July 2024 will (at least at this stage) remain.
  • The low and middle income tax offset (LMITO) will not be extended.
  • No increases in tax rate thresholds despite bracket creep.

However, from the 2022-2023 income year, the Medicare levy low-income threshold will be increased for singles, families, seniors and pensioners (the increased thresholds are indicated in the table below).  Although the Government has not made any changes to the personal income tax rates, it has maintained its stance in ensuring that low-income earners are exempt from the Medicare levy (that is, the amount paid in addition to the tax paid on taxable income).  For singles, this means that those who earn equal to or less than $24,276 will be exempt from the Medicare levy from 1 July 2022.

Medicare levy low-income threshold


Prior to 1 July 2022

From 1 July 2022

Increased by





Families with no children




Single seniors and pensioners




Families with seniors and pensioners




Additional amount of threshold (per child or student) for families with a dependent child or student




Superannuation, where change is the only constant

Operative date

1 July 2025




$950 million

In a bid to ensure generous superannuation concessions are better targeted, equitable and sustainable, as previously announced by the Government, earnings on superannuation balances over $3 million at the end of a financial year will be taxed at 30% from 1 July 2025.  A 15% tax rate will continue to apply to superannuation balances below $3 million (or nil for earnings relating to assets that are held in a retirement pension account), but an additional 15% tax rate will apply to earnings on the proportion of balances above that amount.

Notably, the increased tax rate remains lower than the top marginal tax rate of 45% so, in a sense, earnings are still arguably concessionally taxed particularly if it is the case that the money can be withdrawn from the fund without further tax. The other point to recognise is that this measure will not limit the amount an individual can actually hold in superannuation. The Government estimates that this measure will impact around 80,000 individuals, or 0.5% of individuals with a superannuation account, in the 2025-2026 income year. 

The remaining unresolved contentious issue of significance appears to be whether, for the purposes of calculating the $3 million threshold, it will take account of only realised gains and not unrealised gains on revalued investments.

Cost-of-living relief

Operative date

1 July 2023


Predominantly individuals and families


$14.6 billion

The cornerstone of the Budget is the provision of cost-of-living relief to individuals and families. This will include the following measures:

  • 5 million eligible households and 1 million eligible small businesses will be entitled to rebates from 1 July 2023 of up to $500 for households and $650 for businesses.
  • The Household Energy Upgrades Fund will be established, which will provide low-cost loans for energy-saving improvements to around 170,000 homes.
  • The maximum rates of Commonwealth Rent Assistance will be increased by 15% to offset rising rents, which will support around 1.1 million households over 5 years from 2022-2023.
  • Some patients will be able to obtain 2 months’ worth of treatment in a single visit to the pharmacist for over 300 medicines saving up to $180 per year per medicine from 1 September 2023.
  • Changes to Medicare bulk billing are proposed from 2022-2023 for 5 years to enable GPs to provide free consultations to 11.6 million eligible Australians.
  • A $40 per fortnight increase for JobSeeker recipients and those on Youth Allowance, Austudy and other income support payments is proposed, which will support 1.1 million Australians. This will take effect from 20 September 2023.
  • The eligibility age for the higher rate of JobSeeker payments is proposed to be reduced from 60 to 55, which will increase the base rate for around 52,000 recipients by $92.10 per fortnight.
  • Parenting payments with a base rate of $922.10 per fortnight  (as opposed to the lower JobSeeker payment base rate of $745.20 per fortnight) will be available to single parents until their youngest child turns 14, rather than 8. This will particularly assist single mothers and their children.

NDIS to face a squeeze on costs but more staff

Operative date

1 July 2023


Workers in the disability sector


$60 billion over next 10 years

The National Disability Insurance Scheme (NDIS) was expected to grow significantly over the next 10 years.  This Budget is seeking to curb the increases by increasing the funding to the National Disability Insurance Agency (NDIA) to provide more active monitoring of costs.  The projections are to decrease growth of the Scheme from the current trajectory of 13.8% growth to 8% growth by July 2026.  The Government aims to save more than $60 billion over 10 years.

The NDIS Scheme Actuary has projected that, without action, Scheme expenses would increase by $17.2 billion over 4 years from 2023–2024.  The funding in this measure supports the NDIA to improve the administration of the Scheme, which will reduce additional growth in Scheme expenses by $15.3 billion, moderating additional growth to $1.9 billion over 4 years from 2023–2024.

The Budget will include a further $733 million over four years to fund staff increases and reforms seeking to drive down costs, including:

  • $429.5 million investment in capability and systems to improve processes and planning decisions;
  • $73.4 million to better support participants to manage their plan within budget, including more closely monitoring service providers such as plan managers and support coordinators;
  • $63.8 million to ensure plans are more transparent and flexible for lifetime events;
  • $56.4 million to strengthen decisions about supported independent living including by introducing a panel with highly trained staff to improve consistency of decisions;
  • $48.3 million to report and detect fraud, including supporting IT systems;
  • $29.3 million for improved oversight of services; and
  • $24.6 million to trial blended payment models to improve innovative service delivery.

More funding for Personal Income Tax Compliance Program

Operative date

1 July 2023




$474.9 million of receipts and $90.8 million of payments over 5 years

Tax non-compliance continues to be a major focus of the Government.  An additional $89.6 million and $1.2 million will be provided to the Australian Taxation Office (ATO) and Treasury respectively to extend the Personal Income Tax Compliance Program for two years from 1 July 2025 and expand its scope from 1 July 2023.  The program deploys proactive and corrective activities in areas of non-compliance.

The scope of the program will be expanded to address emerging areas of risks, such as deductions relating to short-term rental properties to ensure they are genuinely available to rent.


No changes to tax rates

Operative date

1 July 2023





There are no changes to company tax rates.

Oil and gas industry changes

Petroleum resource rent tax deductions capped 

Operative date

1 July 2023


Offshore LNG projects


$2.4 billion over next four years

On 7 May, the Treasurer announced changes to the petroleum resource rent tax (PRRT) for offshore LNG projects (following weeks of rumours).  When the key players in the oil and gas industry (and their shareholders) react positively to new taxing measures, you know things could have been much worse for them.  Instead, the proposed changes are relatively modest, but impactful for both taxpayers in the sector and the broader community.

From 1 July 2023 or the 7th year after first production, whichever is the later, in calculating PRRT, taxpayers in offshore LNG projects will be subject to a cap on deductions after the application of mandatory transfers of exploration expenditure, so that only up to 90% of PRRT assessable income can be offset by deductions.  This means there will always be a minimum 10% of PRRT assessable income that is subject to the PRRT (compare this with the expectation that most LNG projects would not pay significant amounts of PRRT until the 2030s).  The cap will not apply to closing-down expenditure, starting base expenditure and resource tax expenditure.

Amounts not able to be deducted will be carried forward and be uplifted at the Government long-term bond rate.

In addition, the Government will proceed with 16 recommendations by the Gas Transfer Pricing (GTP) Review and the earlier Callaghan Review.  Anti-avoidance and arm’s length rules will be updated, and the PRRT regime will be modernised to better reflect emerging developments in LNG project structures.

Together, these measures are expected to (modestly) increase tax receipts over the next four years by just $2.4 billion.  Consultation on the deductions cap and other measures will begin later this year.

Shell Energy decision on petroleum exploration reversed

Operative date

21 August 2013 in respect of exploration; 9 May 2023 in respect of depreciation


Gas and oil projects


Not able to be quantified

The Full Federal Court’s decision in Shell Energy Holdings in 2022 was an important one in defining the breadth of the word "exploration".  Special leave to appeal the decision to the High Court was denied.  However, the Government has announced that it will reverse the decision by statute.

The PRRT legislation will be amended to clarify that “exploration for petroleum” will be limited to the "discovery and identification of the existence, extent and nature of the petroleum resource”.  The definition will not extend to activities and feasibility studies directed at evaluating whether the resource is commercially recoverable, as the Full Federal Court determined.  These amendments will be backdated to 21 August 2013, the date of application of the ATO's Taxation Ruling TR2014/9.

The proposed changes will also ensure that mining, quarrying and prospecting rights (MQPRs) cannot be depreciated for income tax purposes until they are used (not merely held) and will limit the circumstances in which the issue of new rights over areas covered by existing rights lead to tax adjustments. These amendments will apply in respect of all MQPRs acquired or started to be used after 7:30 PM (AEST) on 9 May 2023.

Aged-care sector wages increased

Operative date

1 July 2023


Businesses in the aged-care sector


$11.3 billion over next four years

The Australian Government is committing $11.3 billion to implement a 15% pay rise for aged care workers.

This measure follows on from the findings and recommendation of the Aged Care Royal Commission (2018-2021).  The Royal Commission explored the quality and safety of aged care services, with particular areas of focus including provider funding and workforce capability.

In relation to workforce capability, the Royal Commission noted pay disparity between aged care workers and workers performing a similar function in other sectors, such as health, has contributed to difficulty for the aged care sector to attract suitability qualified staff.  The Royal Commission identified that prior attempts to increase worker pay by increasing funding to aged care providers had been unsuccessful, and so approaching the issue more directly through worker pay rates together with funding uplift was considered more effective.

The Aged Care Royal Commission suggested a work value and equal remuneration application be submitted to the Fair Work Commission to improve pay rates for the aged care sector.  In November 2022, the Fair Work Commission recommended a pay rise, intended to increase staffing of aged care facilities.

The Budget funding increase will be implemented over the next four years starting from 1 July 2023.

Aged care will be the fifth largest area of government spending. 2022-2023 financial expenditure on aged care will increase from $24.6 billion to $29.6 billion (23%).  Rising costs are attributed to the ageing population, aged care recipients growing from 3.5% from 2020-2021 to 2021-2022 to reach 1.5 million recipients.  Aged care costs are projected to reach $35.8 billion by 2025-26.

The Government will provide additional funding of $309.9 million over five years from 2022-2023 to implement recommendations from the Royal Commission into Aged Care Quality and Safety.  $139.9 million will be spent over four years from 2023-2024 to improve accountability and transparency of approved aged care providers by enhancing the Star Rating system.  The Star Rating system seeks to provide information about the quality of the services a provider offers to aged care residents and people seeking out providers in an accessible form.

$12.9 million over two years from 2023-2024 will be dedicated to improving food and nutrition in aged care through the development, monitoring and enforcement of food and nutritional standards.

Clean building MIT concessions expanded to new data centres and warehouses

Operative date

1 July 2025


Foreign investors, construction sector, domestic property funds 


Unquantifiable decrease in receipts over the next 5 years

In a bid to support investment into energy efficient commercial buildings, the Government will expand the clean building managed investment trust (MIT) withholding tax concessions to data centres and warehouses where construction commences after 7:30 PM (AEST) on 9 May 2023.  As part of this measure, the Government will also raise the minimum energy efficiency requirements for existing and new clean buildings to a 6-star rating from the Green Building Counsel of Australia (up from 5-stars) or a 6-star rating under the National Australian Built Environment Rating System (NABERS) (up from 5.5 stars).

The clean building MIT regime was introduced back in 2012 and has remained relatively undisturbed, until now.  The concessions provide for a 10% final withholding tax (reduced from the usual rate of 15%) on “fund payments” made to foreign investors that are resident in countries which have an effective exchange of information agreement with Australia.  The types of payments that are typically covered by this concession in the property fund context are rental income and gains from the sale of property.

Under the current rules, a MIT generally only qualifies for the concessions if its only assets are “clean buildings” (office buildings, shopping centres, hotels used to provide short-term accommodation for travelers, or a combination of these) where construction of the “lowest level” of the building commenced on or after 1 July 2012.  For these purposes, construction of the building is not taken to have commenced merely because works preparing the site for construction, or works undertaken below the lowest level of the building (including any basement level), have commenced. 

MITs that are in the process of preparing new data centre / warehouse sites for construction should carefully assess the status of their project to see if it might qualify for these concessions.  

Build-to-rent concessions to increase housing stock

Operative date

1 July 2024


Individuals and families, property investors, businesses  


Estimated to decrease receipts by $30 million and increase payments by $4.3 million over the next 5 years

For eligible new build-to-rent projects where construction commences after 7:30 PM (AEST) on 9 May 2023, the Government will:

Increase the annual rate for capital works tax deductions (ie. depreciation) from 2.5% to 4%; and  Reduce the final withholding tax rate on eligible fund payments from MIT investments from 30% to 15%.

The measures will apply to build-to-rent projects consisting of 50 or more apartments or dwellings made available for rent to the general public.  For a project to qualify, the Government has stated that:

  • The dwellings must be retained under single ownership for at least 10 years; and
  • Landlords must offer a lease term of at least 3 years for each dwelling.

Consultation will take place on implementation details, including any minimum proportion of the dwellings being offered as affordable tenancies and the length of time dwellings must be retained under single ownership.

It should be noted that concessional withholding tax rates on fund payments relating to MIT investments in affordable housing have been available since 2019.  However, there has been relatively scarce uptake of these concessions owing to the difficulty in establishing that affordable housing investments are eligible to be held by MITs in the first place. 

Specifically, for a trust to qualify as a MIT, one requirement is that its business must (broadly) consist wholly of “eligible investment business” – which relevantly includes investing in land for the purpose, or primarily for the purpose, of deriving rent (sometimes referred to as the “rental purpose” test).  Rental returns on affordable housing being (by definition) below market rates has made it difficult, if not impossible, to establish that the projected rental yield for an affordable housing investment will outweigh the projected capital growth. The result of this is that affordable housing projects typically have not been regarded as eligible investment business (ie. they cannot be owned by MITs). 

Given these measures are clearly targeted at increasing the supply of affordable housing, it is hoped that the final measures will provide some much-needed clarity on the application of the rental purpose test to build-to-rent projects and affordable housing more generally.  

Energy-efficient equipment for small and medium-sized businesses

Operative date

1 July 2023


Small and medium-sized businesses


$314.2 million over next four years

With small and medium-sized businesses and energy transformation at the forefront of the Budget, under the Small Business Energy Incentive, eligible businesses investing in energy-efficient equipment will be entitled to an additional tax deduction of 20% of the capital expenditure incurred on such equipment, with the deduction capped at $20,000.  The incentive seems to be an immediate deduction of the 20%, even if the actual capital expenditure is required to be depreciated.  The incentive is expected to assist up to 3.8 million small and medium-sized businesses.

The 20% bonus tax deductions will apply to businesses with an aggregated annual turnover of less than $50 million, and would appear to overlap with the $20,000 instant asset write-off for small businesses.

A range of depreciating assets (and upgrades to such existing assets) will be eligible under the incentive, including energy-efficient fridges and induction cooktops, assets that support electrification of heating and cooling systems, and demand management assets such as batteries or thermal energy storage.  Eligible assets will need to be first installed or ready for use between 1 July 2023 and 30 June 2024, including any eligible upgrades.

However, certain exclusions will apply to the incentive, such as:

Electric vehicles; Renewable electricity generation assets; Capital works; and Assets not connected to the electricity grid and use fossil fuels.

Trade workers, manufacturers, restaurants, and other small and medium-sized businesses should keep an eye out for the full details of the eligibility criteria, which will be announced by the Government once it completes consultation with stakeholders.  

$20,000 instant asset write-off for small businesses

Operative date

1 July 2023


Small businesses


$290 million over next five years

Broadly, instant asset write-off (IAWO) allows for an immediate deduction for a cost of a depreciating asset for eligible businesses.

The Government will temporarily increase the IAWO for small businesses (ie. those with an aggregated annual turnover of less than $10 million) from $1,000 to $20,000 from 1 July 2023 until 30 June 2024.  This means that small businesses will be able to immediately deduct the full cost of eligible assets costing up to $20,000 that are first used or installed ready to use from 1 July 2023 to 30 June 2024, as opposed to claiming a deduction over a number of years.  The threshold applies on a per asset basis, so eligible businesses can claim IAWO on multiple assets.  

Assets above the $20,000 threshold which cannot be immediately deducted can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter. 

Improving cashflow for small and medium-sized businesses

Operative date

1 July 2023


Small and medium-sized businesses (and some individuals)



Most small to medium-sized businesses are required to make pay as you go (PAYG) instalments which goes towards their annual income tax liability.  Entities that are liable to pay GST may also elect to pay by instalments.  

A 6% GDP uplift rate will apply to small to medium-sized businesses (and some individuals) who are eligible to use the relevant instalment method (this being up to $10 million aggregated annual turnover for GST instalments and $50 million annual aggregated turnover for PAYG instalments) for instalments relating to the 2023-24 income year and which fall due after the enabling legislation receives assent. 

This uplift factor is lower than the 12% rate that would have applied under the statutory formula, freeing up cash for businesses.

The test for solvency in Australia is a cash flow test (rather than a balance sheet test), which focuses on the availability of cash and other sources available to meet a company’s debts as and when they fall due.  As inflation has risen globally, so too has the cost of capital, with many small businesses left without access to external capital.  This cash flow preserving initiative may allow small business to avoid insolvency and continue to trade.

The flow on effects to Australia’s corporate insolvency landscape from tougher tax compliance measures announced as part of the Budget will be interesting.   It is no surprise that the ATO is currently Australia’s largest creditor, and in practice we see many distressed businesses delaying or failing to pay tax as a means to stay afloat. 

Rules for plug-in hybrids under the Electric Car Discount to end

Operative date

1 April 2025


Businesses that provide fringe benefits


Estimated to increase receipts by $30 million and increase GST payments to the states and territories by $5 million over next five years

By way of context, from 1 July 2022, employers do not pay fringe benefits tax (FBT) on eligible electric cars and associated car expenses under the legislated Electric Car Discount scheme.

The Government announced it will end the eligibility of plug-in hybrid electric vehicles from the Electric Car Discount scheme from 1 April 2025.  Arrangements involving plug-in hybrid electric vehicles entered into between 1 July 2022 and 31 March 2025 remain eligible under the Electric Car Discount.   

It should be noted that this announcement has already been enacted, as the Treasury Laws Amendment (Electric Car Discount) Act 2022 received royal assent on 12 December 2022.  

GST compliance program – four-year extension

Operative date

1 July 2023




$3.8 billion in receipts over next 4 years

The Government will provide $588.8 million to the ATO over four years from 1 July 2023 to continue a range of activities that aim to ensure that businesses meet their GST obligations and to help the ATO develop analytical tools to combat emerging risks to the GST system.

This measure is estimated to increase net GST and other tax receipts, by $3.8 billion over the next four years.

Increased ATO funding and small business amnesty program to improve taxpayer compliance

Operative date

1 July 2023


Individuals and businesses


$718 million in receipts and $275.4 million in payments over the next five years

To address the growth of tax and superannuation liabilities, the Government will provide the ATO with funding, over four years from 1 July 2023, to increase its engagement with taxpayers who have debts over $100,000 and aged debts older than two years where those taxpayers are either:

  • public and multinational groups with an aggregated turnover of greater than $10 million; or
  • privately owned groups or individuals controlling over $5 million of net wealth.

Additionally, under a new lodgment penalty amnesty program for small businesses with an aggregated turnover of less than $10 million, failure-to-lodge penalties for outstanding tax statements originally due during the period from 1 December 2019 to 29 February 2022 will be remitted if they are lodged in the period from 1 June 2023 to 31 December 2023. The Government intends for this program to encourage non-complying small businesses to re-engage with the tax system.

Over the five years from 2022–23, these measures are estimated to increase receipts by $718 million and increase payments by $275.4 million.

Expanding the tax anti-avoidance rule

Operative date

1 July 2024


Individuals and businesses


Unquantifiable increase in receipt over 5 years

The Government is proposing to expand the scope of the general anti-avoidance rule contained in Part IVA of the Income Tax Assessment Act 1936 such that it applies to:

  • schemes that reduce tax paid in Australia by accessing a lower withholding tax rate on income paid to foreign residents; and
  • schemes that achieve an Australian income tax benefit, even where the dominant purpose was to reduce foreign income tax. 

The amendments will apply from 1 July 2024, regardless of whether the scheme was entered into before 1 July 2024.

Superannuation changes for businesses

Payday super

Operative date

1 July 2026





The Government announced earlier this month that it will require employers to pay their employees’ super at the same time as their salary and wages with effect from 1 July 2026.  To support this measure, the Government will provide the ATO with additional resourcing to help it detect unpaid super payments earlier and set enhanced targets for the ATO for the recovery of payments.

We previously highlighted the timing of contributions as an area where amendments might make the system more efficient and enable registrable superannuation entity (RSE) licensees to better align transactions with valuations.  We asked whether there would be advantages in being more prescriptive about when employer contributions are required so that RSE licensees can more effectively plan for them.  

Requiring employers to align contributions with their pay cycles, rather than having an option of paying 28 days after the end of a quarter, will make contributions more predictable over time.  RSE licensees should consider surveying large employers in the lead up to this change so that they will have an idea of how the pattern of contributions to their funds will change. 

The shift away from contributions being received quarterly, in our view, removes any sensible possibility of aligning the frequency of valuing unlisted assets with the frequency of receiving contributions.  However, receiving contributions more frequently will go some way to reducing the importance of valuations at any given point in time.

Non-arm’s length income rules amended

The Government will amend the non-arm’s length income (NALI) provisions which apply to expenditure incurred by superannuation funds by:

  • limiting income of self-managed superannuation funds and small APRA regulated funds that are taxable as NALI to twice the level of a general expense.  Additionally, fund income taxable as NALI will exclude contributions;
  • exempting large APRA regulated funds from the NALI provisions for both general and specific expenses of the fund; and
  • exempting expenditure that occurred prior to the 2018-19 income year.

The NALI provisions can produce surprising outcomes and these changes will be welcomed.  

Franked distributions funded by capital raisings

Operative date

15 September 2022





The start date for the measure that was announced by the former Government in relation to franked distributions funded by capital raisings has been amended to 15 September 2022.  In summary, this tax integrity measure is aimed at ensuring the treatment of certain distributions (principally, special dividends) funded wholly or partly by capital raisings are treated as unfrankable.  This measure is discussed in more detail in this G+T Publication.

Multinational tax integrity – Pillar Two reforms

Operative date

1 January 2024




Increase receipts by $370 million and increase payments by $111 million over 5 years from 2022-2023

In the multinational tax integrity package which the Government issued prior to winning the Federal election in May 2022, it announced that it would be closing tax loopholes exploited by multinational groups. This included the adoption by Australia of the OECD’s "two-pillar solution" to reform international taxation rules and ensure that multinational groups pay a fair share of tax wherever they operate.

Pillar One of this solution broadly involves the allocation of taxing rights to where products and services are sold. No announcement was made in relation to Pillar One in the Budget.

Under Pillar Two, a global minimum tax rate of 15% is proposed. The intention behind imposing a global minimum corporate tax rate of 15% is to prevent a "race to the bottom" between countries on corporate tax rates.

The Government indicated that it will implement key aspects of Pillar Two to address the tax challenges arising from digitalisation of the economy. A 15% global minimum tax for large multinational enterprises will apply from 1 January 2024 through the application of an "income inclusion rule". Under this rule, a resident ultimate parent entity in a group would be liable for top-up tax where the group’s income in another jurisdiction is being taxed below 15%. From 1 January 2025, the 15% global minimum tax would be collected through an "undertaxed profits rule", which is expected to operate by applying the top-up tax on a resident subsidiary member of a multinational group if the group’s income in another jurisdiction is being taxed below 15%. In summary, these rules would allow Australia to apply a top-up tax on a resident multinational parent or subsidiary company where the group’s income is taxed below 15% overseas.

The Government is also proposing to introduce a domestic minimum tax of 15%, which would give Australia first claim on top-up tax for any low-taxed domestic income. Essentially this would ensure that if an Australian resident member of a multinational group was subject to an effective tax rate of less than 15%, the shortfall in tax would be collected by Australia rather than another country under income inclusion or undertaxed profits rules in that other country.

The global minimum tax and domestic minimum tax will apply to large multinationals with annual global revenue of EUR750 million (approximately A$1.2 billion) or more.

Infrastructure, Climate and ESG

Infrastructure pipeline may be squeezed

A major focus of the previous Government’s more recent Budgets was its 10 year infrastructure pipeline, ultimately growing to about $120 billion.  The current Government has ordered a review of the 700 projects to assess their economic sustainability.

The review will consider whether the pipeline is fit for purpose and if the Government's investment is focused on projects that improve long term productivity, supply chains and economic growth in cities and regions.  The Government also intends to work with States, Territories and local governments to prioritise the delivery of projects currently under construction and election commitments.

Further investments will be made to improve productivity, safety and resilience. This will include $200 million to develop robust business cases for strategically significant projects.

Hydrogen production

The Government will provide $2 billion to accelerate development of Australia’s hydrogen and clean energy industries, and help Australia connect to new global hydrogen supply chains. Funding includes:$2 billion to establish a new Hydrogen Headstart program, which will provide revenue support for investment in renewable hydrogen production through competitive production contracts; $5.6 million in 2023-2024 to analyse the implications for Australia of intensifying global competition for clean energy industry and identify action by the end of 2023; and $2 million over two years from 2024–2025 to establish a fund to support First Nations communities to engage with hydrogen project proponents and planning processes.

National Reconstruction Fund

The Government has committed $15 billion to the National Reconstruction Fund. Through loans, guarantees and equity investments, the National Reconstruction Fund will partner with the private sector to invest in priority areas that leverage Australia’s natural and competitive strengths in renewables and low emissions technologies, medical science, transport, value-add in agriculture, forestry, and fisheries, value-add in resources, defence capability and enabling capabilities.

The National Reconstruction Fund will be administered by an independent board that will consider factors such as encouraging and improving economic participation by historically under-represented groups when making investment decisions.

Investments in First Nations housing and infrastructure projects

The Government announced $410.4 million for critical investments in First Nations housing and infrastructure projects. This consists of:

  • $111.7 million for a new one-year partnership with the Northern Territory Government to accelerate building of new remote housing;
  • $20.8 million to support Aboriginal Hostels;
  • $23.3 million for housing works in Wreck Bay Village, Jervis Bay Territory; and
  • $92.8 million for critical works to supply essential services to Mutitjulu on the lands of the Anangu people.

Defence projects go slow while AUKUS heaves-ho

Some 30 defence projects will be scaled back, delayed or scrapped to save $7.8 billion, which will be redirected to AUKUS.  A $19 billion increase in spending is expected over the next four years but is said to be fully offset by spending cuts.

There will be $254.1 million allocated to replace, enhance and sustain the Department of Veterans’ Affairs’ new and at-risk legacy ICT systems.

$4.5 billion will be allocated over 10 years from 2023–2024 (and $482.7 million per year ongoing) to support Australia’s acquisition of nuclear-powered submarine capability. Funding includes:

  • $4.2 billion over 10 years from 2023–2024 (and $482.7 million per year ongoing) to support the establishment and ongoing operation of a new Australian Submarine Agency, within the Defence portfolio to manage Australia’s nuclear-powered submarine program;
  • $127.3 million for 4,000 additional Commonwealth supported places at universities and other higher education providers for courses to support the skills requirements of the program;
  • $87.2 million to support initial regulatory activities and the development of regulatory standards and frameworks, and non-proliferation and safeguard arrangements for the nuclear-powered submarine program; and
  • $52.7 million for the Department of Foreign Affairs and Trade to provide international policy advice and diplomatic support for the nuclear-powered submarine program.

The Government will also provide Australian Naval Infrastructure Pty Ltd with an equity injection to commence construction and design works for a submarine construction yard and to design the Skills and Training Academy, in South Australia.

Considered infrastructure investment

$1.8 billion will be injected over 10 years from 2023–2024 for infrastructure priorities to support productivity and jobs. Funding includes:

  • $1.1 billion in 2032–33 to continue existing road maintenance and safety programs, with:
    • $500 million for the Roads to Recovery Program;
    • $350 million for national road network maintenance;
    • $110 million for the Black Spot Program;
    • $85 million for the Bridges Renewal Program;
    • $65 million for the Heavy Vehicle Safety and Productivity Program; and
    • $18.9 million for transport research organisations and innovation projects;
  • $361.9 million for infrastructure projects in New South Wales, including safety upgrades on the Bells Line of Road and Nowra Bypass planning;
  • $200 million for the Major Projects Business Case Fund to support the planning of land transport infrastructure projects; and
  • $60 million to continue supplementary local road funding in South Australia.

Capacity Investment Scheme

The Government intends to boost renewable energy generation in Australia through the Capability Investment Scheme, which is intended to unlock over $10 billion of investment in the energy grid.  Funding includes: 

  • $9.9 million over five years from 2022–2023 (and $0.4 million per year to 2041–42) for the Australian Energy Market Operator to deliver auctions in South Australia and Victoria and undertake contract management activities for selected projects; and
  • $6.4 million in 2023–2024 for the Department of Climate Change, Energy, the Environment and Water to design the auction process in late 2023 to operate in South Australia and Victoria, and continue work on a national rollout of the scheme.

The Government is also providing $46.5 million to the Australian Energy Regulator to regulate energy markets and protect consumers throughout this transformation.

$12 billion of the Government's $20 billion investment in the Rewiring the Nation project is allocated to transformational transmission projects, including:

  • $1 billion in Tasmania’s Battery of the Nation project; 
  • $1.5 billion towards Renewable Energy Zones and offshore wind in Victoria; and
  • $4.7 billion for critical transmission in New South Wales.

The Government announced a $1.3 billion Household Energy Upgrades Fund, which will provide low-interest loans and fund upgrades to social housing to improve energy performance. The Fund will inject $1 billion into the Clean Energy Finance Corporation to provide more than 110,000 low interest loans for energy-saving home upgrades in partnership with private lenders.

The Government will also provide $300 million to partner with States and Territories to make energy performance upgrades to social housing.

The Government claims that 170,000 households will save on energy bills through this Fund.

Net Zero Authority

A national Net Zero Authority will be established to assist workers, industries, and communities in the transition to renewable energy.

The Authority will work across all levels of government and with workers, regional communities and First Nations people. It will facilitate economic development and diversification and help smooth the changes as Australia moves to a clean energy economy. The Authority will ensure workers are supported as they transition to new opportunities and enable First Nations Australians to meaningfully participate.

The Authority will include a focus on the regions, industries and workers that traditionally powered Australia’s economy. As some industries adapt and transition, the Authority will work to ensure new industries come online, and workers, communities and regions are supported.

Powering the Regions Fund

$1.3 billion is allocated over five years from 2022–2023 (from $1.9 billion provided in the 2022–2023 October Budget) to support the decarbonisation of existing industries, develop new clean energy industries and support sovereign manufacturing capacity essential to the energy transition including:

  • $450.3 million over four years from 2023–2024 (and a further $149.7 million over 3 years from 2027–2028) to establish the Safeguard Transformation Stream to support decarbonisation investments at trade-exposed industrial facilities covered by the Safeguard Mechanism;
  • $400 million to establish the Industrial Transformation Stream to support reduction of direct and indirect emissions at existing industrial facilities, or clean energy development, in regional Australia;
  • $400 million to establish the Critical Inputs to Clean Energy Industries Stream to support the sovereign manufacturing capability of industries that produce inputs (primary steel production, cement and lime, alumina and aluminium) that are essential to the development of Australia’s clean energy industries;
  • $14.5 million to accelerate the development of the offshore renewable energy industry growth strategy and regulatory compliance activities;
  • $8.6 million to support implementation and review of the Safeguard Mechanism reforms; and
  • $3.9 million for a review of policy options to reduce carbon leakage, including of an Australian carbon border adjustment mechanism.

Funding of $89 million has also been provided through the Powering the Regions Fund to support energy transition investments important to regional Australia.

National Approach for Sustainable Urban Development

$687.4 million is allocated for a national approach to sustainable urban development in Australia. Funding includes:

  • $305 million for the Macquarie Point Precinct and University of Tasmania Stadium, to deliver urban renewal projects in Hobart and Launceston;
  • $211.7 million to establish the Thriving Suburbs Program to provide grants for community infrastructure in urban and suburban communities through a competitive grants program;
  • $159.7 million to establish the Urban Precincts and Partnerships Program to support investment in place-based priorities of local urban communities; and
  • $11.0 million to establish the Cities and Suburbs Unit within the Department of Infrastructure, Transport, Regional Development, Communications and the Arts to deliver the National Urban Policy and the regular State of Cities report.


$20.9 million is allocated towards initiatives to decarbonise the transport and infrastructure sectors and support achieving the net zero by 2050 target.

$267.4 million is allocated to support land, maritime and aviation transport priorities, including to increase productivity and maintain safety across the sectors.

Agency funding

Extension and merger of crime taskforces

Operative date

1 July 2023


Individuals and businesses


$279.5 million of receipts and $256.6 million of payments over 5 years

Serious financial crimes lead to millions of dollars of lost revenue in Australia every year. The Government is committed to provide additional funding for the Serious Financial Crime Taskforce (SFCT) and Serious Organised Crime program (SOC) which target serious and organised crime groups, financial crime and tax evasion. Both programs require a high level of collaboration between the ATO, national policing and other enforcement and regulatory agencies, they will come together as a merged SFCT commencing 1 July 2023.

The funding for both programs currently ends on 30 June 2023 but will be extended over 4 years to 30 June 2027.


Operative date

1 July 2023





As part of the Budget measures directed at supporting the supply of cheap, clean and reliable energy, there will be a significant funding boost for both the Australian Competition & Consumer Commission (ACCC) and the Australian Energy Regulator (AER).  This additional funding for energy regulators will support stronger enforcement of existing regulatory measures, as well as the development and implementation of new regulation to facilitate the market transition. 

The AER will receive the biggest funding boost, including:

  • $35.6 million over four years to continue existing compliance and enforcement activities to regulate and monitor energy markets; and
  • $10.9 million over four years for new legislated functions to support energy transformation and reduce emissions.

The ACCC will be provided with $14.7 million in funding over 5 years to support the implementation of recently announced gas market regulatory measures. The new ACCC functions to be supported by this funding include:

  • administering and enforcing recently introduced $12 per gigajoule cap on the price of gas; and
  • further developing the mandatory Gas Code of Conduct which is currently under public consultation.

This is in addition to $58 million in funding for the ACCC over three years to establish a National Anti-Scam Centre.

Establishment of public registry of beneficial ownership of legal structures

The Government has committed $1.9 million over two years from 2023–24 to establishing a public registry of beneficial ownership of companies and other legal vehicles, including trusts. This follows public consultation on this issue throughout 2022.

This additional transparency may assist insolvency practitioners in their investigations of insolvent corporate trusts, including in tracing assets and identifying dealings which are not at arm’s length, such as related party transactions.

The regulation of insolvent corporate trusts was one such matter explicitly included in the terms of reference for the Parliamentary Joint Committee on corporations and financial services, and the allocation of funds to establish this public registry may be an indication of the measures which are to come.

National Anti-Corruption Commission

In October 2022, the Government flagged its intention to spend $270 million on the establishment of the independent National Anti-Corruption Commission (NACC).  The NACC’s purpose will be to investigate corrupt conduct across Federal public sector.

Specifically, the funding would include $262.6 million over four years, replacing the less visible and narrower focused Australian Commission for Law Enforcement Integrity (ACLEI).  $27.5 million is pledged towards hiring staff and building technology environments to support the NACC.  $166.7 million will be sourced from ACLEI and the Contingency Reserve for the Commonwealth Integrity Commission.  $3 million will be spent over four years from 2023-2024 and $0.8 million ongoing per year for the Inspector of the NACC to oversee the NACC pursuant to the National Anti-Corruption Commission Act 2022.

The legislation that was passed to establish NACC in November 2022 followed many years of public debate about its implementation and scope.

It will take time before we witness a public display of its work and before we know whether it will be sufficiently resourced to allow widespread investigation of the Commonwealth sector, including whether it will be sufficiently resourced to support those who are in its gaze.  Certainly, the level of funding does not appear to raise immediate concerns when compared to the funding of its state equivalents, but it will ultimately depend on the breadth of its agenda.

Our alert on the impact of the NACC on the private sector can be found here.

The NACC will commence operating on 1 July 2023.

The Administrative Appeals Tribunal

In December 2022, the Government announced that it would abolish the Administrative Appeals Tribunal (AAT).

The AAT handles the review of Commonwealth Government decisions and so is an important body for those having to deal with the consequences of Commonwealth Government decisions which are amenable to merits review.  Significant areas of its work include taxation, social security, access to the NDIS, migration and freedom of information.

The current Government criticised the capacity of the AAT to deal with its workload.  The new body and the funding committed will seek to address these capacity constraints.

The Government will provide $89.5 million over 5 years from 2022–2023 (and $1.5 million per year ongoing) to support the establishment of the new body, made up of:

  • $63.4 million over two years from 2023–2024 to appoint additional full-time members to address the backlog of AAT cases;
  • $14.4 million over 5 years from 2022–2023 (and $1.5 million per year ongoing) for the Attorney-General’s Department to manage the transition to the new administrative review body; and
  • $11.7 million over two years from 2022–2023 to develop a modern case-management system for the new administrative review body.

A new entity will be established with the transfer of staff and cases from the existing AAT following the passage of legislation to establish the new entity.

Cyber, privacy, data and digitalisation

Cyber and privacy

The Government made a number of cyber, privacy, and online safety funding announcements in the Budget.  The more notable of these measures include:

  • $101.6 million over five years from 2022–2023 (and $11.8 million per year ongoing) to support and uplift cyber security in Australia through a range of measures, including those focussing on the security of critical infrastructure assets;
  • $45.2 million over four years from 2023–24 (and $8.4 million per year ongoing) for stronger privacy protection and enforcement, including a standalone Privacy Commissioner;
  • $88.8 million over two years to support Consumer Data Rights in the banking, energy, and non-bank lending sectors; and
  • $134.1 million of additional investment over 4 years (and $33.7 million per year ongoing, in addition to the existing base funding of $10.3 million per year ongoing) for the Office of the eSafety Commissioner (see our articles on the eSafety Commissioner here and here).

Digitalisation and technology

Digital health, mygov, digital id, fighting scams, growing critical technology industries

The Government has announced ongoing and new funding for digitisation initiatives and to support new technology services, projects and agencies, including:

  • $824.4 million to fund digital health initiatives, including modernising the My Health Record system and ongoing funding for the Australian Digital Health Agency (see our article on Digital Health in Australia: 2023);
  • $134.5 million to sustain the myGov platform for an additional year, but falling far short of the recommendations for long-term, significantly increased myGov funding made in January 2023 by an independent myGov audit led by former CSIRO chair David Thodey; and
  • $101.2 million over five years to support the development and uptake of technologies to drive economic growth, boost technology industries and support the creation of new jobs. Funding includes supporting businesses to integrate quantum and artificial intelligence (AI) technologies into their operations through a “Critical Technologies Challenge Program”, extension of the National AI Centre, establishing an Australian Centre for Quantum Growth, and supporting SMEs’ adoption of AI technologies.

Increase to National Housing Finance and Investment Corporation liability cap

The liability cap of the National Housing Finance and Investment Corporation has been increased by $2 billion to a total of $7.5 billion, in order to support more lending to community housing providers for social and affordable housing projects. This is expected to support around 7,000 more new social and affordable dwellings.