The 2022-23 Federal Budget is here and this year’s announcements covered new budget measures from the cost of living to small business digitalisation. You’re probably thinking about what the new announcements mean for you and your business, so we’ve rounded up a budget recap to help you understand the new measures.
Before we go into the details, here’s a quick rundown of key items to give you a snapshot of this year’s budget:
- The 2022-23 Budget has a deficit of $78 billion.
- The net debt is predicted to increase to $865 billion by June 2026 or 33.1% of GDP.
- There’s a GDP growth forecast of 3.5% for 2022-23.
- The unemployment rate is expected to fall below 4% in 2022.
Now, let’s dive a little deeper into the new budget measures that may affect you and your business.
A Sweet Relief – Fuel excise cut in half for 6 months
If fuel prices have been giving you headaches, this will give you relief. Fuel excise is set to be reduced by 50% for six months from 30 March 2022. This change means the excise rate will now be 22.1 cents per litre. The ACCC will monitor retailers to ensure the excise reductions are passed on at the pump.
An extra $420 one-off cost of living tax offset
There will be a one-off $420 increase to the low- and middle-income tax offset (LMITO) for the 2021-22 income tax year. The combined $420 and LMITO will give eligible taxpayers (with a taxable income between $37,000 and $126,000) a tax reduction of up to $1,500 for a single income household, or $3,000 for a dual-income household.
$250 cost of living payment for welfare recipients
The Government is providing a new one-off, income tax-exempt payment of $250 to help with increases in the current cost of living. It will be paid automatically to all eligible pensioners, welfare recipients, veterans, and eligible concession card holders in April 2022.
Huge wins for small businesses
There is some great news for small businesses with the announcement of a $1 billion technology investment boost and $2.6 billion in tax cuts for small businesses.
Small businesses with an annual turnover of less than $50 million will have access to a new 20% deduction bonus for the cost of external training courses delivered to their employees by providers registered in Australia. In addition to this, eligible small businesses will be able to deduct an extra 20% of the cost of expenses and depreciating assets that support digital uptake. This includes portable payment devices, cyber security systems or subscriptions to cloud-based services. A $1 spend will equate to a $1.20 deduction.
Digitalisation and training expenditure incurred from 7:30pm (AEDT) on 29 March 2022 and 30 June 2022 will be claimed in the 2023 income tax return. For those expenditures incurred between 1 July 2022 to 30 June 2024, deductions will be claimed in the income year in which the expenditure was incurred.
Boost in apprenticeship support
The Government introduced a new Apprenticeship Incentive System with a new $2.8 billion investment to help increase take up and completion rates for apprenticeships including $5,000 payments to new apprentices and up to $15,000 in wage subsidies for employers who take them on.
50% minimum super drawdown extended
The Government has extended the 50 per cent reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products for a further year to 30 June 2023.
Dismissed COVID-19 support measures
While we see new measures to provide support for businesses, the Government has not extended two COVID-19 support measures beyond 30 June 2023.
The Company Loss Carry Back Offset allows companies with an aggregated turnover of less than $5 billion to carry back losses incurred in the 2020 to 2022 income years back to the 2019 income year onwards. Companies that elect to apply these provisions will receive a tax refund in the loss-making year equal to the amount that has been offset by the losses carried back.
The Temporary Full Expensing incentive allows businesses with an aggregated turnover of less than $5 billion to claim an immediate deduction for the cost of depreciating assets acquired after 7:30 pm on 6 October 2020. There have been no announcements yet as to whether the Instant Asset Write-off incentive will be reintroduced after the end of the Temporary Full Expensing.
There were many more measures announced for the 2022-23 Federal Budget. If you need help with understanding what the budget means for you and your business, please reach out to our team at 07 3878 9181 or email us at email@example.com.