What does the budget mean to you?
In brief, the 2022-2023 budget is inclusive of the following measures.
A CUT TO FUEL EXCISE
A 50% Temporary cut to to the 44.2 cents per litre fuel excise. Currently the excise (a form of tax) on fuel earns the Government billions of dollars each year, which they re-invest back into our roads and infrastructure. For the next 6 months, the Government is budgeting to cut this excise by 50% per litre to ease the pressure at the bowser.
That means a possible saving of $12 for a 60 Ltr tank, which, if you full up once a week would mean $12 x 26 weeks = $312 savings for the 6 months.
20% EXTRA DEDUCTIONS FOR CERTAIN BUSINESS EXPENSES
For small businesses (up to $50 million turnover), there is a proposed uplift of 20% on the expenditure incurred on external training courses.
Also, the same 20% uplift will be an allowable deduction for the cost incurred on business expenses and depreciating assets that support digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. The deduction is allowable for expenditure incurred from 7.30 29 March 2022 to 30 June 2023. An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost.
LOW TO MIDDLE INCOME EARNERS TAX OFFSET EXTENDED
The low and middle income tax offset will be increased by an amount of $420 for individuals with earnings up to $126,000 per annum, and payable in respect of the 2021-22 income year. The Government has not announced an extension of the low and middle income offset beyond the 2021-22 income year. The maximum offset payable to an individual is $1,500 where their earnings are between $48,001 and $90,000 which then phases out up to an amount of $126,000
The low income tax offset remains unchanged and will continue to apply for the 2021-22 and 2022-23 income years. The maximum amount of the low income tax offset is $700 on an income of $37,500. The offset is phased out for individuals who earn greater than $66,667.
Super Guarantee rate will continue to rise to 10.5% for 2022-23. Note that the Budget did not contain any change to the legislated Super Guarantee rate rise from 10% to 10.5% for 2022-23.
The 50% reduction of the minimum superannuation pension drawdown requirements will be extended for the 2022-23 income year. Given the ongoing volatility in financial markets, this measure will allow retirees to avoid selling assets in order to satisfy the minimum drawdown requirements.
AN EXTRA $250 PAYMENT TO ELIGIBLE CONCESSION HOLDERS
$250 cost of living payment - the Government will make a $250 one-off cost of living payment in April 2022 to eligible pensioners, welfare recipients, veterans and concession card holders.
APPRENTICE WAGE SUBSIDY EXTENTION
The Budget confirmed the extension of the Boosting Apprenticeship Commencement (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidies by 3 months to 30 June 2022. It intends to pay up to $5,000 for new apprenticeships and up to $15,000 in wage subsidies. Please confirm details with your apprenticeship association.
The Budget also includes funding over 5 years to introduce a new Australian Apprenticeships Incentive System from 1 July 2022 as further support to employers and apprentices in "priority occupations"
$8.6 million to expand the Home Guarantee Scheme to 50,000 places per year. Up to 35,000 places per year will be available for first home buyers; Family Home Guarantee will be increased to 5,000 places per year; and a new Regional Home Guarantee will offer up to 10,000 places per year
PAID PARENTAL LEAVE
More flexibility to take your 20 weeks paid parental leave.
With increasing inflation and low wage growth, the increased cost of living is really starting to bite. You are not alone.
This articles intention is to inform rather than advise and is based on legislation at the time. Each Taxpayer’s circumstances vary so we strongly recommend that you discuss this information with your Tax Agent, Accountant or Bas Agent before implementation. If you take, or do not take action as a result of reading this article, we accept no responsibility for any financial loss incurred. This is general advice only.