Unpacking the 2022/23 Federal budget
If the end of the financial year is accountant’s Christmas, then budget night is New Year’s Eve, and with just weeks until the federal election, a war in Europe, a pandemic and natural disasters front of mind for Australians and for the government, this was an interesting one.
If you forgot to tune in with your popcorn last night (you missed out!) we’ve got you covered with our wrap up of the best bits of Treasurer Josh Frydenberg’s 2022/23 federal budget.
If trips to the petrol bowser have been leaving you in tears over the last few weeks and months, you’ll be glad to know help is on its way. The libs have decided to slash the tax levy on fuel in half for the next six months – saving us a cool 22 cents a litre.
Pensioners, carers, veterans, job seekers and other eligible concession cardholders will receive a one-off $250 payment to assist with the rising costs of living. This payment will be made to eligible recipients automatically in April 2022.
Low and middle income earners will receive a once-off extra $420 back in their 2021/22 tax returns on top of the existing low and middle tax offset, which means some can expect a healthy $1500 back at tax time.
Getting down to business
We were stoked to find out there were a bunch of wins for business owners in this year’s budget.
It was music to our tech loving ears when the technology investment boost was announced. The $1 billion initiative will see businesses with an annual turnover of less than $50 million able to deduct an extra 20 per cent of the cost of eligible expenses and depreciating assets that support digital uptake. This may include subscriptions to cloud-based services like Xero, portable payment devices and cyber security systems and applies to expenditures of up to $100,000 from now until 30 June 2023. We’re writing our EOFY wishlist already!
Small businesses will also have access to a bonus 20 per cent deduction for the cost of eligible external training courses delivered to their employees.
The ATO and accounting software developers will collaborate to automate reporting requirements, reduce costs and improve processing times, align instalment payment obligations with real time intelligence on financial performance and improve cash flows. This means that if a business is having a ‘bad year’, it will pay instalments in line with this.
Around $2.6 billion in tax cuts for small businesses will flow through in 2022‑23. These cuts are part of the $21 billion in tax cuts the government has committed to small businesses from FY 2015‑16 to FY 2024‑25.
$5.6 million will be invested into a small business unit within the Fair Work Commission and $8 million to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to offer business planning, capacity building and financial literacy.
The apprentice employment incentive has been given a facelift. Through wage subsidies the Government will invest a further $2.8 billion to support Australian apprenticeships, to boost uptake and encourage employee retention in the face of skills shortages.
Help for home buyers
The Government has announced that it will expand the Home Guarantee Scheme for first home buyers with an additional 50,000 places including 10,000 places for a new Regional Home Guarantee open to non-first home buyers. This guarantee gives eligible candidates the opportunity to buy a home with a minimum 5 per cent deposit.
The Family Home Guarantee scheme aimed at helping single parents either buy their first house or re-enter the property market has also been extended. This scheme sees eligible parents only have to come up with a 2 per cent deposit to buy a house and not pay LMI.
Paid parental leave has had a major shake up which will see parents given 20 weeks of paid parental leave that can be split between parents in whichever way they like. Previously there were two payments, one two week payment for “Dad’s and partners” and 18 weeks of parental leave pay. The government is also adjusting the income test to include a household income threshold of $350,000 a year.
Genetic testing will also be made free for those planning to become parents for conditions including cystic fibrosis, spinal muscular atrophy and fragile X syndrome from November next year.
Investing in women’s health and safety
A slew of announcements have been made in support of women’s health conditions including endometriosis. $58 million over four years will be spent toward helping women with endometriosis, this includes $16 million for a specialised clinic in each state and territory.
A medication called Trodelvy, used to treat a rare form of breast cancer will also be included in the Pharmaceutical Benefits Scheme, saving those undergoing treatment tens of thousands of dollars.
$1.3 billion has also been pledged toward a broad range of measures and programs towards to end of violence against women and children. This funding will be rolled out over the next six years.
Flood victim support
In welcome news for those affected by the devastating east coast floods, $150 million from the Emergency Response Fund will flow towards flood-affected communities in NSW and QLD to support recovery and disaster resilience activities through 2022-2023. A further $800,000 in funding will go towards the Regional Small Business Support Program in 2023, assisting flood-impacted small businesses.
There’s lots more to unpack but these are some of the major announcements – if you have questions about the Federal Budget or how any of these changes might affect you or your business give us a call today.