The 2022-23 Federal Budget Highlights

The full 2022-23 Federal Budget papers are now available at www.budget.gov.au.  You can also read the media releases outlining key highlights direct from the Treasury Department at ministers.treasury.gov.au

 The budget is designed to assist the Australian economy as it continues to recover from the pandemic.  The Treasurer has emphasised an expected budget deficit of $78 million for 2022-23 and confirmed an unemployment rate of 4%. 

A positive outcome of the budget is an increased low- and middle-income tax offset and a one-off $250 payment for welfare recipients and pensioners.  The 6-month fuel excise relief was an unusual entry but welcome addition to assist with easing the cost of living for many households.

👩‍🍳Delivering more jobs working towards unemployment below 4%

🚢Investment in defence and border security

🚑Record investment in health, women’s safety, and education

🏬 Support for small business

☀ Investment in renewable energy, technology, and transport

 

We are still working our way through understanding the details behind each of the budget announcements.  In the meantime, this short summary will hopefully assist individuals and businesses to understand a little of what to expect:

Individuals

  • The low- and middle-income tax offset will be increased by $420 income year to ease the current cost of living pressures. This applies to over 10 million individuals

  • A one-off payment of $250 will be made to individuals who are currently in receipt of Australian government social security payments, including pensions, to ease the cost of living pressures.

  • Additional funding will be provided over 5 years to support older Australians in the aged care sector with managing the impacts of the COVID-19 pandemic.

  • Costs of taking a COVID-19 test to attend a place of work will be tax-deductible for individuals and exempt from fringe benefits tax from 1 July 2021.

  • A single Paid Parental Leave scheme of up to 20 weeks of paid leave will replace the existing system of 2 separate payments.

  • CPI indexed Medicare levy low-income threshold amounts for singles, families, seniors and pensioners.

  • The number of guarantees under the Home Guarantee Scheme will be increased to 50,000 per year to assist home buyers who have a lower deposit.

Business

  • Additional state and territory COVID-19 business support grant programs will be eligible for tax treatment as non-assessable non-exempt income until 30 June 2022.

  • Small and medium businesses will be able to deduct an additional 20% of the expenditure incurred on external training courses provided to their employees.

  • Small and medium businesses will be able to deduct an additional 20% of eligible expenditure supporting digital adoption.

  • The Boosting Apprenticeship Commencements wage subsidy will be extended by 3 months.

  • Concessional tax treatment will apply from 1 July 2022 for primary producers selling Australian Carbon Credit Units and biodiversity certificates.

  • Access to employee share schemes in unlisted companies will be expanded.

  • The PAYG instalment system is set for a structural overhaul with a set GDP uplift of 2% to apply for the 2022–23 income year.

  • Additional funding will be provided to further reform insolvency arrangements, including the insolvent trading “safe harbour”.

  • Business registry fees will be streamlined over 3 years from 2023–24.

  • Wholly owned Australian incorporated subsidiaries of the Future Fund Board of Guardians will be exempt from corporate income tax.

Excise and customs duty

  • Excise and excise-equivalent customs duty on petrol and diesel will be reduced by 50% from 30 March 2022 for 6 months.

  • The temporary tariff concession for COVID-19 related medical and hygiene products will be made permanent.

  • Administration of fuel and alcohol excise and excise-equivalent customs duty will be streamlined.

Superannuation

The 50% reduction of the superannuation minimum drawdown requirements for account-based pensions will be extended for an additional year

 

Source:  Wolters Kluwer Tax Team , Australian Government Treasury,

Jo Bright