Here’s a quick skim of the 2022-2023 Federal Budget. Released on 29th March 2022, you’ll notice the obvious political spin on the content, given the election is fast approaching. This information is based on Commonwealth of Australia data, further details on the budget can be found on their budget summary page.

BUDGET 2022-2023

Budget Snapshot

With higher rates of Australians employed and fewer on welfare, the fiscal outlook suggests a significant improvement and strengthening of the economy.
A stronger economy, coupled with improved near term commodity prices has motivated upward revisions to tax receipts and a reduction in benefit payments for the unemployed.

Post Mid Year Economic and Fiscal Outlook (MYEFO), an improvement has been noted in the estimated underlying cash balance by $103.6 billion over the 5 year period to 2025-2026. This projection will see the deficit halve to 1.6% of GDP by 2025-2026.

Economic and fiscal strategy

A Stage 1 objective of creating low unemployment, Government has instigated Stage 2 of its fiscal and economic strategy. The need for emergency financial support has passed, particularly since the rate of unemployment is expected to drop below 4% this year.
Gross debt as a share of GDP is forecast to drop 5.4% lower than previously projected. Furthermore, gross debt is expected to continue to fall to 40.3% of GDP, 9.6% lower than projected at MYEFO.

Economic outlook – Global

Global consumer spending and investor and business sentiment are at risk, partly due to inflated food, oil and gas prices as a result of Russia’s invasion of Ukraine.
Ongoing and recent COVID-19 pandemic outbreaks, particularly in China’s manufacturing and port regions continue to put global supply chains at risk.
The current and forecast state of the Australian economy indicates that Australia is well placed to absorb the effects of these disruptions.

Economic outlook – Domestic

The domestic economic impacts of COVID-19 outbreaks have moderated over time, partly due to the high vaccination rates and the resourcefulness of the Australian business community in adapting to these challenges.
Australia’s economic recovery is expected to continue with improvements in exports, employment, wage rises and tax cuts.

So what does all this mean?

Temporary Fuel Excise Relief

A reduction of the fuel excise by 50% for 6months. Petrol and diesel prices will drop from 44.2 cents per litre to 22.1cents per litre.

Cost of Living Tax Offset

From 1 July this year, over 10 million individuals will receive a one-off $420 cost-of-living tax offset. Combined with the low- and middle-income tax offset (LMITO), eligible earners will receive up to $1,500 for a single income household, or up to $3,000 for a dual income household.

One Off Cost of Living Payment

A one-off, income tax-exempt payment of $250 was paid to all eligible pensioners, welfare recipients, veterans and eligible concession card holders in April 2022.

First Home Buyers

The Home Guarantee Scheme and the First Home Super Saver Scheme will make it easier for more people to enter the housing market.

Cheaper Medicines

Around 2.4 million Australians will benefit from reducing the concessional and general PBS Safety Net thresholds. From 1 Jul 2022, PBS Safety Net thresholds will be further reduced from $1,542.10 to $1,457.10 for general patients and from $326.40 to $244.80 for concessional patients.

Skilled Workers

There is a continued investment in Australian apprenticeships to ensure businesses have the skilled workforce they need. A further $2.8 billion will support Australian apprenticeships, building on the $13.3 billion spent on apprenticeships and traineeships since 2013.

Helping Small Businesses

More than $21 billion in tax cuts will be delivered to small businesses from 2015-16 to 2024-25, with around $2.6 billion flowing in 2022-23. This includes reducing the company tax rate for small businesses from 30% in 2013-14 to 25% from 1 July 2021 – the lowest level in 50 years.

Regional Economic Development

More than $2& billion invested in a Regional Accelerator Program will create jobs across regional Australia including in the modern manufacturing, critical minerals and agriculture sectors.

Improving Australia’s Water Supply

The Government is enhancing drought resilience to support prosperous regions. The supply and reliability of water for regions and farming communities has been enhanced through a National Water Grid Fund to develop the next generation of critical water infrastructure projects.

Investment in Infrastructure

The Government’s $120 billion 10‑year infrastructure investment pipeline is investing in projects across Australia.

Increased PBS Listings

More than 2,800 new or amended PBS listings have been approved since 2013. A further $2.4 billion is being provided to support access to cost-effective PBS medicines, including treatments for cystic fibrosis, Spinal Muscular Atrophy and bowel cancer.

Creating Opportunities for Women

The 2022-23 Women’s Budget Statement invests a further $2.1 billion in initiatives to improve the lives of women and children. The Government is providing further choice and flexibility so families can better manage work and childcare. It is supporting more women into work, narrowing of the gender pay gap, supporting entrepreneurship and development of leadership skills.

Investment in Cyber Security and Intelligence

The 2020 Cyber Security Strategy set out a $1.7 billion, 10-year plan for a more secure online world for Australians, their businesses and essential services. More than $2.3 billion has been invested since 2014 to strengthen defences and protect the community. Since 2014, 21 imminent terrorist attacks have been disrupted.

Great Barrier Reef Plan

An additional $1 billion is being invested in marine science to build the Great Barrier Reef’s resilience to climate change, remove pest species and improve the reef’s water quality. This brings total Government investment in the reef to $3 billion since 2014.

For further information on how the federal budget may help you and your business, contact Anthony at Adcock Accounting today.

This advice is general in nature and has been prepared without taking into account your particular financial circumstances, needs and objectives. Before making any decision, you should assess your own circumstances and seek professional advice from your financial and/or taxation advisor.