Super Outcomes – May 2023 Federal Budget

Superannuation tax concessions, SG payment frequency changes confirmed in 2023 Federal Budget

The 2023 Federal Budget focused on providing cost-of-living relief, and made no new significant announcements for superannuation. The industry had anticipated the Budget may have included insight into several initiatives, such as:

• the final legislated objective for super
• the application of the superannuation guarantee (SG) to paid parental leave and
• the extension of the SG to self-employed people, including the increasing number of gig workers.

Better targeted super concessions

The only new information provided on the government’s proposal to reduce the earnings tax concession for individuals with total balances over $3 million, was that the estimated revenue from the measure includes $50 million in receipts associated with updating the notional contribution methodology applicable to all defined benefit members. No detail was included on this proposed update.

Securing Australians’ superannuation package – changes to SG payment frequency

As previously announced, employers will be required to pay SG contributions at the same time they pay salary and wages commencing from 1 July 2026. A new compliance system will better enable the Australian Taxation Office (ATO) to recover unpaid super. Changes to the design of the SG charge will need to be made to align with the increased frequency of payments and consultation on this will be conducted.

Non-arm’s length income (NALI) provisions

The Budget revealed amendments to measures announced by the previous government, including clarifying the NALI rules that apply to super fund expenditure.

Other measures of interest

• An additional $5 million over five years from 2023/24 to continue the super consumer advocate.
• Additional funding for ASIC to support its investigation of greenwashing and other sustainable finance misconduct, funded from industry levies.
• Additional funding to the ATO to support engagement with businesses to address the growth of tax and superannuation liabilities.