So what’s included in this year’s Federal Budget?
What opportunities are in it for you?
At 7.30pm 29 March, the 2022 Federal Budget was announced by Treasurer Josh Frydenberg. Designed to address economic factors including ongoing pandemic recovery and inflationary pressures. The 2022 Federal Budget includes a strong focus on:
- the rising cost of living,
- additional Aged Care funding,
- measures to boost digital adoption and skills training for small business, and
- superannuation measures announced in the 2021 Federal Budget which are now legislated and effective from 1 July 2022.
The accompanying webinar is a panel discussion by Accountants and Planners from RJ Sanderson. Our professionals discuss the budget announcements, new measures released, and the opportunities these initiatives create in the coming years.
As always, most of the budget announcements are statements of proposed changes by a Coalition Government only, and do not come into force until they are passed into law.
Cost of Living
- Temporary reduction of fuel and diesel excise by 22.1 cents per litre (until 28 September 2022)
- One-off tax-free payments of $250 on 28 April 2022, to eligible pensioners, welfare recipients, veterans and concession card holders
Tax for Individuals
- One-off cost of living tax offset increased by $420 and extended for a final year – comes into effect from 1 July 2022.
- Tax deductibility of COVID-19 test expenses for tests required to attend a place of work.
- Personal tax rates remain unchanged for 2022-2023. Stage three tax cuts (which are already legislated) will begin in 2024.
- Extension of the 50% reduction to Superannuation minimum payment requirements for another 12 months through to 30 June 2023
- Super Guarantee legislated rate rise increases to 10.5%
- Initiatives already legislated and effective from 1 July
- Removal of the work test applied to non-concessional and salary sacrifice contributions; and ability for those aged 74 or under to use the bring-forward arrangement.
- Removal of work test for Spousal super contributions for those aged 67-74
- Age eligibility for downsizer contributions reduced to 60 and over
- Superannuation Guarantee will increase to 10.5% from 1 July 2022, increasing up to 12% by 1 July 2025
Tax for Businesses
- Bonus 20% expenditure deduction for digital adoption costs for small businesses up to $100,000 per annum; this comes into effect immediately, and is available for costs incurred through to the end of June 2023
- A bonus 20% expenditure deduction for upskilling and training for small businesses; this comes into effect immediately, and is available for cost incurred through to the end of June 2024
- Owners will have an option to base their PAYG instalments on current financial performance. The uplift factor for PAYG and GST instalments will be set at 2% for the 2022-2023 income year. The 2% GDP uplift will apply to small to medium enterprises eligible to use the relevant instalment methods.
- Employee share schemes for unlisted companies could previously issue $5,000 worth of shares each year. This cap has been increased to $30,000 per participant, per year for up to 5 years, plus 70% of dividends and cash bonuses.
- FBT will not be incurred by businesses who provide COVID-19 test to employees
Social Security and Aged Care
- Increased childcare subsidies were brought into effect in March 2022, four months earlier than planned, enabling families with two or more children to be on average $2,200 per annum better off.
- Paid parental leave scheme merges current Partner and Primary carer initiatives. The merged program now totals 20 weeks paid parental leave, that can be split among carers as needed. The income cap for the scheme now reflects the total household income of up to $350,000 per annum.
- PBS safety net thresholds reducing to $1457 for individuals or $244.80 for concession card holders from 1 July 2022
- Additional funding allocated to the existing Aged Care Reform plan
- Home Guarantee scheme expanded – 50,000 places for home ownership support. This includes 35,000 places per year for first home buyers. Family Home Guarantee increased to 5,000 places per year; and there is an introduction of a new Regional Home Guarantee for 10,000 places per year.