Uncertainty has cast its shadow over recent years, but are we finally in for a more predictable ride as we step into 2024? Let’s delve into the key factors influencing the landscape.

Inflation and Labour Dynamics

According to RBA Governor Michelle Bullock, “Inflation is on the right track post-peak, but its return to target may take a bit longer than anticipated.” While signs are positive, domestic uncertainties linger. Inflation persists, growth has tapered, and the labour market remains taut. The Australian economy faces risks amid uncertainties about China and ongoing global conflicts. At this stage, the RBA hasn’t ruled out further interest rate hikes.

The unemployment rate holds steady at 3.7%, and the labour market remains tight. Wages saw a 1.3% increase in the September 2023 quarter and a 4.0% rise over the year, reaching a 14-year high. Hiring high-skilled workers has become particularly challenging, with employers seemingly hesitant to offer inflated salaries to lure top talent.

Tax Changes and Concessions Sunset

Commencing on 1 July 2024, stage 3 tax cuts are set to dramatically simplify personal income tax brackets. The 32.5% and 37% tax brackets will merge into a single 30% rate for those earning between $45,001 and $200,000—assuming the May Federal Budget doesn’t alter or scrap these changes!

By 1 July 2024, the superannuation guarantee rate will climb to 11.5%. However, for small and medium businesses with a group turnover of less than $50 million, several concessions are slated to conclude or revert to standard levels:

  • The Skills and Training Boost concludes on 30 June 2024, offering a bonus deduction equal to 20% of eligible training expenses incurred between 29 March 2022 and 30 June 2024.
  • The Small Business Energy Incentive, set to end on 30 June 2024, aims to provide an additional 20% deduction on eligible depreciating assets supporting electrification and energy efficiency, pending parliamentary approval.
  • The instant asset write-off for businesses with a group turnover of less than $10 million is scheduled to decrease to $1,000 from 1 July 2024. However, legislation for this measure is pending parliamentary approval.

Evolving Worker Rights and Rewards

Expect heightened scrutiny of workplace practices in 2024 following numerous changes in 2023:

  • A 5.75% increase in the minimum wage to $23.23 per hour starting 1 July 2023.
  • New rules and a two-year limit on some fixed-term employment contracts with no renewals.
  • A landmark case defining worker classification, prompting the ATO to issue new rulings ensuring correct entitlements. Employers must assess contractors accurately.
  • Greater flexibility for unpaid parental leave.

In conclusion, navigating the economic and social landscape in 2024 will require vigilance, adaptability, and strategic planning. From inflation and labour dynamics to tax changes and evolving worker rights, businesses and individuals will need to stay informed and proactive to succeed.

At C&N Accountants, we understand the challenges of staying ahead in a rapidly changing world. Our team of experts can help you navigate the complex landscape of 2024 and beyond, providing tailored solutions to meet your unique needs. Contact us today to learn more and start planning for a successful future.