In case you missed it, last week, on the 29th of March 2022, the Government handed down its 2022-23 Federal Budget. With the next Federal election to be held in May 2022, this was not your typical pre-election spending promises Budget. A likely recognition of the significant level of Government debt from previous and forecasted budgetary deficits and the Government’s desire to be seen as being fiscally responsible in the current economic environment.
The major focus of the Budget was on the cost of living. And whilst the forecast “cash splash” may eventuate for some (Social Security Card holders and low and middle-income earners), for many of our clients, halving the fuel excise for the next six months was as good as it got.
The infographic below provides a neat snapshot.
We have summarised below the key take-outs.
Fuel excise halved for 6 months
This equates to a drop in the price of fuel of 22.1c per litre. Whilst welcome it’s worth noting that the fuel excise is only one element that determines the cost of fuel at the pump, and other factors (such as the price of oil) may change and soak up some of the anticipated savings from this measure.
Low and middle tax income offset (LMITO) to be boosted by $420
If you qualify (income less than $126,000), this offset will become available when you lodge your income tax return for the current financial year, either through a refund of overpaid tax, or a reduction in your tax payable.
Small businesses that invest in training and upskilling for their employees may be eligible for an additional 20% deduction on top of a deduction for the cost of the training itself. Similarly, eligible small businesses will be able to deduct an additional 20% of the costs incurred on business expenses and depreciating assets that support the move to digital.
The ability to halve current minimums has been extended another 12 months into 2022/2023.
Whilst the announcements this year were minimal for super, it is important to remember a number of announcements from last year’s Budget will take effect from 1 July 2022, including:
- allowing a downsizer contribution to be made to super if you sell your principal residence at age 60 or above (currently age 65 or above) and;
- the ability to make contributions between 67 and 75 without the need to meet the work test which currently applies.
We can assist you to determine which of these and other super changes may be of benefit to you.
One-off $250 Payment
To be made to eligible social security recipients this month to assist with increasing costs of living. The payment will be made to recipients of various income support payments including (but not limited to) the age pension, JobSeeker, disability support pensions and youth allowance. It is also payable to holders of the Commonwealth Seniors Health Card and Pensioner Concession Card holders.
Continuation of Pandemic Leave Disaster Payment
For those who are unable to work and earn income because they (or someone they’re caring for) must self-isolate or quarantine due to COVID-19. The payment is valued at $750 (if 20 or more hours of work are lost) or $450 if you lost at least 8 hours.
Parental Leave Pay and Dad and Partner Pay combined into Paid Parental Leave
The move to a single scheme provides up to 20 weeks in a fully flexible and shareable scheme for eligible working parents. It also means that eligible single parents will benefit as they will have access to two additional weeks.
Expansion of the Home Guarantee Scheme
Available to first home buyers and single parents entering or re-entering the housing market. Under this and the newly introduces Regional Home Guarantee scheme, the Government provides support to enable homes to be purchased with deposits as low as 5% and, in some cases, as low as 2%.
As mentioned above, this summer reflects only a selection of the measures announced. Many of the measures may be dependent on the Government being re-elected in the upcoming Federal Election in May and will require the passage of relevant legislation through Parliament.
However, it is never too early to start thinking about what sort of impact these announcements could have on your future financial wellbeing. To find out more, please reach out to us directly.