Federal Budget 2022 Highlights


“A stronger economy is helping to repair the budget”


Federal Treasurer Josh Frydenberg has handed down the Morrison Government’s last Federal Budget before the (yet-to-be-called) election. A pre-election Budget normally sets the scene for the Government’s election platform, and this Budget is no different.


This year’s Budget sweeteners focused on relieving cost of living pressures. With an election looming, the Government needed to strike a balance between delivering relief to ordinary Australians on the everyday expenses of petrol and groceries, while at the same time avoiding stimulating the economy excessively to heighten inflation.


Overall, the 2022 Federal Budget focused largely on supporting low and middle-income earners, social security recipients and those looking to buy a home.


So, what were the Budget highlights from a finance perspective?

 

Temporary relief in fuel prices

The war in Ukraine has led to an increase in oil prices and some motorists have faced paying more than $2.20 a litre for fuel.


The Budget announced the Government will reduce fuel excise – for 6 months - by 50 per cent. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.


The ACCC will be watching retailers to ensure this is passed on to motorists.



 

$250 Payment for Government payment recipients

The Budget provides a one-off, tax-exempt payment of $250 to eligible pensioners, welfare recipients, veterans and concession card holders.


It will be paid automatically to 6 million Australians in April 2022.








 

$420 extra for low & middle-income earners

In its final year of operation, the Government has decided to increase the Low- and Middle-Income Tax Offset by $420.


Over 10 million low and middle-income earners will receive a one-off $420 cost of living tax offset on their tax return in addition to the $255 - $1080 depending on your taxable income (up to $126,000 per year)






 

First home buyers scheme extended

The government is expanding its First Home Super Saver Scheme, where people only need to have a 5 per cent deposit to buy a house with no lenders mortgage insurance (LMI).


It's expanding the scheme from 10,000 places up to 35,000 places a year.








 

Enhanced Paid Parental Leave scheme

The Dad and Partner Pay Scheme will be rolled into Parental Leave Pay to create a single scheme of up to 20 weeks.


Paid Parental Leave can also be taken any time within two years of the birth or adoption of their child.


The income test will also be broadened to have an additional household income threshold of $350,000.


The change seeks to create greater flexibility between couples as to how they share care and work responsibilities for newborn or adopted children.

 

Superannuation

The Budget proposes to extend the minimum amount that needs to be drawn from account-based income streams to the 2022/23 financial year.


This means individuals with account-based pensions or term allocated pensions will be required to draw less from their savings, in line with the current year minimums.

 


Tax avoidance is on the radar

The Government is extending a task force that targets tax avoidance by wealthy individuals, multinationals, large public & private groups and trusts.








 

Small business changes

Small business training deductions: The Government is proposing to allow a deduction of 120% of eligible costs incurred in training staff in small businesses (with an aggregated annual turnover less than $50 million). This is proposed to apply from 29 March 2022 to 30 June 2024.


Small business technology deductions: Small businesses may be eligible to deduct up to 120% of eligible business costs which support the business adopting digital technologies, such as cloud services or cyber security systems. This is expected to operate from 29 March 2022 to 30 June 2023.


Changes to PAYG instalments: The Government proposes to allow PAYG instalments for businesses to be calculated from approved software systems, based on current financial performance from 1 January 2024, subject to industry feedback. This aims to calculate more accurately withholding rather than having businesses wait until they have lodged a tax return to receive a refund of over-withheld amounts.

 

Remember, it’s important to know these announcements are only proposals and won’t become law until they pass Parliament. Some of these may depend on the outcome of the upcoming Federal Election.


If you have any questions in relation to these measures and their potential impact on you, please speak to us so we can look at your current personal circumstances and assess how you will be affected. You can reach us anytime on 07 3396 8518 or admin@investmentzone.com.au


 

Want to speak to our Financial Planning team?


Investment Zone is here for you.


Arrange a no-cost, no obligation appointment with Financial Planner Brad Macaulay at www.investmentzone.com.au/bookonline













 

The information in this communication has been prepared on a general advice basis only. The advice has been prepared without taking account of your specific objectives, financial situation or needs. Accordingly, you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation, and needs. In cases where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (or other relevant information statements) and consider such document before you make any decision about whether or not to acquire the product. For these reasons, it is imperative that you seek advice from your financial adviser before making any investment decisions. Investment Zone Pty Ltd (ABN 18 104 622 611) provides financial services as a Corporate Authorised Representative no. 296974 of Financial Force Pty Ltd ABN 42 091 425 464, AFSL no. 238337

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