2023-2024 Federal Budget - Corporate Affairs

Corporate Affairs

Powering the Regions Fund - final design

The Government will allocate $1.3 billion over 5 years from the 2022-23 from $1.9 billion provided in the 2022-23 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 4 years from 2023-24 (and a further $149.7 million over 3 years from 2027-28) to establish the Safeguard Transformation Stream to support decarbonisation investments at trade-exposed industrial facilities covered by the Safeguard Mechanism
• $400.0 million over 4 years from 2023-24 to establish the Industrial Transformation Stream to support the reduction of direct and indirect emissions at existing industrial facilities, or clean-energy development, in regional Australia
• $400.0 million over 3 years from 2023-24 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 over 4 years from 2023-24 to accelerate the development of the offshore renewable energy industry growth strategy and regulatory compliance activities
• $8.6 million over 4 years from 2023-24 to support implementation and review of the Safeguard Mechanism reforms
• $3.9 million over two years from 2023-24 for a review of policy options to reduce carbon leakage, including  an Australian carbon border adjustment mechanism.

Funding of $89.0 million has also been provided through the Powering the Regions Fund to support energy transition investments important to regional Australia, including the 2023-24 Budget measures titled Capacity Investment Scheme and Ensuring the Supply of Reliable, Secure and Affordable Energy.

Budget Overview p 33
Budget Paper No 2 p 78
Regional Ministerial Budget Statement p 23
Building a clean energy future Fact Sheet
Media Release

GST compliance program - four-year extension

The Government will provide $588.8 million to the ATO over 4 years from 1 July 2023 to continue a range of activities that promote GST compliance. This measure is estimated to increase GST receipts by $3.8 billion, and other tax receipts by $3.8 billion, over the 5 years from 2022-23. These activities will ensure that businesses meet their tax obligations, including accurately accounting for and remitting GST, and correctly claiming GST refunds. Funding through this extension will also help the ATO develop more sophisticated analytical tools to combat emerging risks to the GST system.

Budget Paper No 2 p 19

Treasury Portfolio - additional resourcing

The Government will provide $162.4 million over 4 years from 2023-24 (and $8.3 million per year ongoing) to support the delivery of Government priorities in the Treasury portfolio. Funding includes:

• 88.8 million over two years from 2023-24 to support the continued operation of the Consumer Data Right in the banking, energy and non-bank lending sectors, progress the design of action initiation and uplift cyber security

Budget Paper No 2 p 213
Budget Overview p 40

Stronger Privacy Protection and Enforcement

The Government will provide $45.2 million over 4 years from 2023-2024 (and $8.4 million per year ongoing) for stronger privacy protection and enforcement. Funding includes:

• 44.3 million over 4 years from 2023-24 (and $8.4 million per year ongoing) for the Office of the Australian Information Commissioner to support a standalone Privacy Commissioner, progress investigations and enforcement action in response to privacy and data breaches, and enhance its data and analytics capability

Budget Paper No 2 p 63
Media Release

Next Steps for Digital ID

The Government will provide $26.9 million in 2023-24 to sustain and develop the next stage of the Digital ID program. Funding includes:

• $24.7 million for the Department of Finance and the Digital Transformation Agency (DTA) to maintain the current Digital ID system and design the policy and legislative foundations to transition to an economy-wide Digital ID ecosystem with an independent regulator.

Budget Paper No 2 p 113

Strengthening Australia's Anti-Money Laundering Framework

The Government will provide $14.3 million over 4 years from 2023-24 to support policy and legislative reforms to harden Australia against illicit financing and evaluation of Australia's anti-money laundering framework. Funding includes:

• $8.6 million over 3 years from 2023-24 to the Australian Transaction Reports and Analysis Centre (AUSTRAC) to develop and consult stakeholders on legislative reforms to modernise Australia's anti-money laundering and counter-terrorism financing regime and support preparation for, and participation in, the evaluation of Australia's regime against global standards by the Financial Action Task Force
• $5.6 million over 4 years from 2023-24 in additional departmental resourcing for the Attorney-General's Department.

Budget Paper No 2 p 63

Foreign Investment - interfunding exemption

The Government will exempt passive or low-risk interfunding transactions from mandatory notification requirements and fees under the Foreign Acquisitions and Takeovers Act 1975. This change will apply from the date of commencement of the amendments to the legislation. An interfunding exemption will mean qualifying interfunding investments will not require prior approval or attract fees. This will significantly decrease the regulatory burden and financial costs for investors who undertake interfunding activities. Interfunding transactions will remain reviewable national security actions under the Foreign Acquisitions and Takeovers Act 1975, which ensures the Treasurer's national security powers will remain available if a national security risk arises.

Budget Paper No 2 p 18

Implementation of a global minimum tax and a domestic minimum tax

The Government will implement key aspects of Pillar Two of the OECD/G20 Two-Pillar Solution to address the tax challenges arising from the digitalisation of the economy:

• A 15 per cent global minimum tax for large multinational enterprises with the Income Inclusion Rule applying to income years starting on or after 1 January 2024 and the Undertaxed Profits Rule applying to income years starting on or after 1 January 2025.
• A 15 per cent domestic minimum tax applying to income years starting on or after 1 January 2024.

Budget Speech p 14
Budget Paper No 2 p 20
Budget Overview p 63

Amending the tax law to reduce compliance costs for general insurers

The Government will introduce legislation to amend the tax law to minimise the regulatory burden facing the general insurance industry. The introduction of the new accounting standard, AASB17 Insurance Contracts, by the Australian Accounting Standards Board, has meant that the tax law is no longer aligned with accounting standards. This change to the tax law will allow general insurers to continue to use audited financial reporting information, which is calculated according to the new standard, as the basis for their tax returns. The measure will have effect for income years commencing on or after 1 January 2023.

Budget Paper No 2 p 14

Clarifying the tax treatment of 'exploration' and 'mining, quarrying and prospecting rights'

The Government will amend the Petroleum Resource Rent Tax (PRRT) legislation to clarify that 'exploration for petroleum' is limited to the 'discovery and identification of the existence, extent and nature of the petroleum resource' and does not extend to 'activities and feasibility studies directed at evaluating whether the resource is commercially recoverable'. This measure is consistent with the Government's policy intent and the Commissioner of Taxation's administrative treatment and written-binding advice as set out in TR 2014/9, which applies from 21 August 2013. The amendments will apply to all expenditures incurred from 21 August 2013.

Budget Overview p 63
Budget Paper No 2 p 16

Petroleum Resource Rent Tax - Government Response to the Review of the PRRT Gas Transfer Pricing arrangements

The Government will amend the Petroleum Resource Rent Tax (PRRT) in response to the Treasury's Review of the PRRT Gas Transfer Pricing (GTP) arrangements. The Government will introduce a cap on the use of deductions to offset assessable PRRT income of liquefied natural gas (LNG) producers under the PRRT. The cap will bring forward PRRT receipts from LNG projects which are yet to pay PRRT and ensure a greater return to taxpayers from the offshore LNG industry. The cap will limit deductible expenditure to the value of 90 per cent of each taxpayer's PRRT assessable receipts in respect of each project interest in the relevant income year and apply after mandatory transfers of exploration expenditure.

Budget Overview p 63
Budget Paper No 2 p 23

Primary industries - Changes to agricultural production levies

The Government is making changes to the following agricultural levies at the request of industry to better reflect the current needs of the agricultural sector:

• Stone fruit levy: from 1 July 2023, at the request of Summerfruit Australia Limited, the Government will decrease the marketing component of the stone fruit levy from 0.441 to zero cents per kilogram of stone fruit, increase the research and development component from 0.539 to 0.980 cents per kilogram and maintain the Plant Health Australia (PHA) rate of 0.02 cents per kilogram of stone fruit. These changes will maintain the overall levy rate at 1 cent per kilogram of stone fruit.
• Rubus levy: from 1 October 2023, at the request of Raspberries and Blackberries Australia, the Government will decrease the research and development component of the rubus levy from 10 to 2 cents per kilogram of the fruit, reduce the marketing component from 2 to zero cents per kilogram of the fruit, and introduce a PHA component at 2 cents per kilogram of the fruit, to cover industry's financial commitments under the Emergency Pest Response Deed. These changes will decrease the overall levy rate from 12 to 4 cents per kilogram of the fruit.

Budget Speech p 13
Budget Paper No 2 p 7
Budget Overview p 34
Media Release

Amending measures of the former Government

The Government will amend measures announced by the former Government to provide greater certainty to taxpayers:

• Amend the start date of the 2016-17 MYEFO measure: Tax integrity - franked distributions funded by capital raisings from 19 December 2016 to 15 September 2022.
• Amend the start date for some components of the 2022-23 March Budget measure: Streamlining excise administration for fuel and alcohol package from 1 July 2023 to 1 July 2024. The changed start date applies to the measures that:
  • remove overlapping Australian Border Force and ATO systems (Uniform Business Experience)
  • streamline license application and renewal requirements
  • remove regulatory barriers for excise and excise equivalent customs goods (including lubricants, bunker fuels for commercial shipping industries, and vapour recovery units)
  • further, the ATO will publish on its website a public register of entities that hold excise licences to store or manufacture excise and excise equivalent customs goods, from 1 July 2024.
• Amend the non-arm's length income (NALI) provisions that apply to expenditure incurred by superannuation funds by:
  • limiting the income of self-managed superannuation funds and small Australian Prudential Regulation Authority (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
  • exempting expenditures that occurred prior to the 2018-19 income year

Budget Paper No 2 p 13

Tobacco Excise - measures to improve health outcomes and align the treatment of stick and non-stick tobacco tax

The Government will encourage smokers to quit by increasing tobacco excise and excise-equivalent customs duty by 5 per cent per year for 3 years from 1 September 2023, in addition to ordinary indexation. The Government will also align the tax treatment of tobacco products subject to the per kilogram excise and excise-equivalent customs duty (such as roll-your-own tobacco) with the manufactured per-stick rate, by progressively lowering the 'equivalisation weight' from 0.7 to 0.6 grams. These progressive decreases will occur on 1 September each year from 2023, with the new weight coming fully into effect from 1 September 2026. This will raise the per-kilogram duty accordingly.

Budget Speech p 14
Budget Paper No 2 p 11

Reform of the Product Stewardship for Oil Scheme

The Government will increase the Product Stewardship for Oil (PSO) levy by 5.7 cents from 1 July 2023. The PSO levy will increase from 8.5 cents to 14.2 cents per litre for specific oils and greases. The Government will also make consequential changes to PSO category 8 benefits from 1 July 2023, raising these to 14.2 cents for oils to match the increased PSO levy.

Budget Paper No 2 p 25

Tax Integrity - improving engagement with taxpayers to ensure timely payment of tax and superannuation liabilities

The Government will provide funding over 4 years from 1 July 2023 to enable the ATO to engage more effectively with businesses to address the growth of tax and superannuation liabilities.

Budget Speech p 14
Budget Paper No 2 p 29

Increasing the Passenger Movement Charge

The Government will increase the Passenger Movement Charge from 1 July 2024 by $10 from $60 to $70 per passenger. The Passenger Movement Charge is a charge levied on passengers departing Australia on international flights or sea transport, irrespective of a passenger's intention to return to Australia. The Passenger Movement Charge was last increased in 2017, and the increase is broadly in line with inflation.

Budget Paper No 2 p 8

Extending the clean building managed investment trust withholding tax concession

The Government will extend the clean building managed investment trust (MIT) withholding tax concession to data centres and warehouses.

Budget Paper No 2 p 18

Philanthropy - updates to the list of specifically listed deductible gift recipients

The Government will amend the tax law to specifically list the following organisations as deductible gift recipients (DGRs) for the following dates:

• The Voice No Case Committee from the day after the entity is registered with the Australian Charities and Not-for-profits Commission to 30 June 2024
• Justice Reform Initiative Limited from 1 July 2023 to 30 June 2028
• Susan McKinnon Charitable Foundation Ltd from 1 July 2023 to 30 June 2028
• Transparency International Australia from 1 July 2023.

Budget Paper No 2 p 24
Budget Overview p 51

Preserving Australia's Global Economic Influence

The Government will provide ongoing funding to the Department of the Prime Minister and Cabinet to strengthen international engagement and preserve Australia's influence in key regional and economic fora, including the G7, G20 and ASEAN.

Budget Paper No 2 p 192