2022 - 23 Federal Budget. Did someone say Election?
On Tuesday, 29 March 2022, Treasurer Josh Frydenberg handed down the 2022-23 Federal Budget, his 4th Budget.
In a very clear election Budget, unsurprisingly, the Treasurer announced a range of cost of living measures, including a one-off $420 cost of living tax offset for low and middle income earners, and a $250 payment for pensioners and welfare recipients. The fuel excise will also be reduced by 50% (i.e. 22.1 cents per litre) for 6 months, starting from midnight on Budget night.
For small businesses, a Skills and Training Boost will provide a new 20% bonus deduction for eligible external training courses for upskilling employees. In addition, businesses will receive a similar 20% bonus deduction for expenditure on digital technologies for investments of up to $100,000 per year.
What it means for Individuals
The Low and Middle Income Tax Offset (LMITO) will be extended for another year. The low and middle income tax offset allows those earning up to $126,000 to receive up to $1080 after they’ve submitted their tax returns. In addition to this, there will be a further payment of $420 for the current financial year. Taxpayers earning up to $126,000 were previously eligible for payments between $255 and $1,080. Under the changes, they will now receive between $675 and $1,500. If you’re eligible, payments for the 2021-22 income year will be paid from 1 July 2022 when you submit your tax return for the current financial year.
In addition, a widely flagged one-off, income tax-exempt payment of $250 will be paid automatically to all eligible pensioners, welfare recipients, veterans and eligible concession card holders in April 2022.
Also widely flagged is a reduction in fuel excise by 50 per cent for 6 months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre. The measure will commence on 30 March 2022 and will remain in place for 6 months, ending on 28 September 2022, and should reduce the cost of filling up a standard tank by about $11.
No changes were made to the personal tax rates for 2022-23. The Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25 as already legislated.
The Home Guarantee Scheme will be extended for those eligible, to 50,000 places for 3 years from next financial year, and 35,000 a year ongoing. These will include 35,000 guarantees per year for the First Home Guarantee, which was formerly known as the First Home Loan Deposit Scheme, 5,000 places for the Family Home Guarantee, and 10,000 places per year to 30 June 2025 for a new Regional Home Guarantee, that will allow those who have not owned a home for 5 years to purchase a new home in a regional location with a minimum 5 per cent deposit.
The Paid Parental Leave scheme will be amended by rolling Dad and Partner Pay into Parental Leave Pay to create a single scheme of up to 20 weeks, fully flexible and shareable for eligible working parents as they see fit. The Paid Parental Leave can be taken any time within 2 years of the birth or adoption of a child.
What it means for Small Business
For business, the 2022 Federal Budget was all about tax breaks and apprenticeships – plus a helping hand for a hard-hit tourism industry.
The business tax breaks includes:
Skills and Training Boost - Until June 2024 for every $100 a small business (with aggregated annual turnover of less than $50 million) invests in external training courses for their employees they will get a $120 tax deduction. The external training courses will need to be provided to employees in Australia or online, and delivered by entities registered in Australia.
Technology Investment Boost - Until June 2023 for every $100 a small business (with aggregated annual turnover of less than $50 million) spends on new digitalising their business (for items such as cloud accounting, online security and eInvoicing software) they will get a $120 tax deduction up to $100,000/year ().
ReBoot - An extension of the current wage subsidy programs around apprenticeships, a new streamlined Australian Apprenticeships Incentive System and a new program to help lift youth employment. The overhauled Australian Apprenticeships Incentive System will attempt to grow the number of qualified trades people by subsidising the wages of select apprentices and trainees, providing up to $5,000 payments to new apprentices (in priority sectors) and up to $15,000 in wage subsidies for employers who take them on.
Measures around the PAYG Instalment system designed to improve short-term cashflow. The annual increase in the quarterly amounts payable will reduce from 10% to 2%.
Changes to procurement rules to make it easier for small businesses to win contracts and have government-invoices paid more quickly.
Funding for the Fair Work Commission to establish a dedicated unit to support small businesses, including with unfair dismissal and general protections disputes.
Funding to improve wireless NBN access for households and businesses in regional and remote areas.
Significant funding to support the recovery of the Australian tourism sector in response to the pandemic impact, including further assistance for travel agents. Almost half will be rolled out globally as part of a government bid to reignite international tourism after nearly two years of border closures due to COVID-19.
One long standing policy that has been repeatedly extended is the instant asset write-off program for businesses with annual turnover of less than $5 billion. This was not extended in the Budget and could end on 30 June 2023.
What it means for Superannuation
The superannuation measures include:
The temporary 50% reduction in minimum annual payment amounts for superannuation pensions and annuities will be extended by a further year to the end of the 2022-23 financial year.
The Budget did not contain any change to the legislated Super Guarantee (i.e. employer superannuation contributions) rate rise from 10% to 10.5% for the 2022-23 financial year.
Please find following a link to more detail on the Australian Government's 2022-23 Federal Budget. https://budget.gov.au
For more information call Cam on 0411 034 275 or email firstname.lastname@example.org.
The information presented is general in nature and not to be used, relied or acted upon without seeking professional advice to ensure that the information appropriate for your individual circumstances. National Taxation accepts no liability for any errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. www.nationaltaxation.com.au. ABN 63 665 545 130