Federal Budget Summary2022
Federal Budget Summary2022
TAXES
• Temporary reduction in the fuel excise - one of the first announcements was a halving of the fuel excise from about 44 cents per litre to 22 cents per litre for 6 months (starting from midnight on Budget night), at a cost of $3 billion. The fuel excise is a bit of a sacred cow and governments are loathe to meddle with it, but as instant sugar hits go, that’s about a $12 saving per tank for most people.
• The Low and Middle Income Tax Offset (LMITO) will be increased by $420 for 2021-22 – while the LMITO is legislated to cease this year (and no announcement was made that it would be extended), the Government did announce a one-off $420 cost of living tax offset for the 2021-22 income year which will see the LMITO increased up to a maximum of $1,500 (for 2021-22 only).
• No changes announced regarding personal tax rates - the legislated Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25.
• Digitalising trust returns – the Government has announced that from 1 July 2024, all trust tax return filers will be given the option to lodge income tax returns electronically.
SUPERANNUATION
• Super pension drawdowns – the 50% reduction in the minimum annual payment amounts for superannuation pensions and annuities that was provided during the economic downturn caused by the pandemic will be extended by a further year to the 2022-23 income year.
• Super Guarantee rate - the Budget did not contain any change to the legislated Super Guarantee rate rise from 10% to 10.5% for 2022-23.
SOCIAL SECURITY
• $250 cost of living payment - the Government announced that in April 2022, it will provide a one-off cost of living payment of $250 to eligible pensioners, welfare recipients, veterans and concession card holders.
• Paid Parental Leave scheme will integrate existing schemes to give eligible families access to up to 20 weeks leave to use in ways that suit their specific circumstances.
SMALL BUSINESSES
• Small business 20% deduction boost: skills training and digital adoption - businesses with aggregated annual turnover less than $50 million will receive a 20% uplift on deductions for eligible expenditure on external training courses and digital technology (the cost of business expenses and depreciating assets that support digital uptake), or, as the Treasurer described it, for every $100 spent, businesses can deduct $120. The measure will apply to eligible expenditure incurred from 29 March 2022 until 30 June 2024 (for skills training) and 30 June 2023 (for digital adoption).
• Employee Share Schemes – the Government will expand access to employee share schemes and further reduce red tape so that employees at all levels can directly share in the business growth they help to generate. Where employers make larger offers in connection with employee share schemes in unlisted companies, participants can invest up to $30,000 per participant per year, accruable for unexercised options for up to 5 years, plus 70 per cent of dividends and cash bonuses; or any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit. The Government will also remove regulatory requirements for offers to independent contractors, where they do not have to pay for interests.
Please don't hesitate to contact our office should you have any questions on matters relating to the Federal Budget 2022.
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