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Treasurer Josh Frydenberg last night handed down his latest Federal Budget. The key focus of the Budget was relieving the cost-of-living pressures on Australian families and was light on key reforms or legislative changes in comparison to Budgets handed down in years past. The governments’ generosity should be taken with a pinch of salt as it was delivered with the election looming around the corner.

The cost-of-living relief offered by the government has been made through temporary measures and one-off cash payments which should be well received by the Australian public.

A summary of the key measures is as follows:

Individuals

  • Income tax rates and thresholds to remain the same in 2022-23 with the next round of income tax cuts to commence in 2024-25 at this stage;
  • Pensioners, welfare recipients, veterans and concession card holders will receive a one off cash payment of $250 to be delivered in April 2022;
  • The Low and Middle Income Tax Offset (LMITO) to be increased by $420 to increase ceiling on the tax offset to $1,500. Approximately 10 million taxpayers are expected to benefit to some degree; and
  • The excise on petrol, diesel and other fuel and petroleum-based products will be reduced by 50% for a six month period (commencing on 30 March 2022 and ending on 28 September 2022).

Small Business

  • Small businesses with an aggregated annual turnover less than $50 million will have access to a 20% bonus tax deduction for the cost of external training courses delivered to their employees;
  • Small businesses with an aggregated annual turnover less than $50 million will be able to deduct a bonus 20% of the cost of business expenses and depreciating assets that support digital uptake, up to an annual cap of $100,000. Eligible expenditure includes technological investments such as portable devices, cyber security systems and subscriptions to cloud based services; and
  • Apprentice Wage Subsidy Extension – the Boosting Apprenticeship Commencement and Completing Apprentice Commencements wage subsidies will be extended by 3 months to 30 June 2022.

COVID-19 Specific

  • The government has announced that it will extend the measure which enables COVID-19 business support payments to be treated as non-assessable, non-exempt income for tax purposes until 30 June 2022.

Companies

  • PAYG Instalments – from 1 January 2024, companies will be allowed to choose to have their PAYG instalments calculated based on current financial performance, extracted from business accounting software (with some tax adjustments).

Superannuation

  • Super Pension drawdowns – the temporary 50% reduction in the minimum annual payment amounts for superannuation pensions and annuities will be extended a further year to 30 June 2023; and
  • Superannuation Guarantee Rate –the legislated rise in the rate to 10.5% for the 2022-23 year will still take place as no changes were announced.

Housing

  • The Housing Guarantee Scheme has been extended to provide 35,000 places to first home buyers, 5,000 places to single parents and 10,000 places for buyers in regional areas in the newly released Regional Home Guarantee.

Employee Share Schemes

  • An expansion of ESS and a further reduction in red tape to make employee share schemes more attractive and accessible in an effort to retain skilled workers;
  • Participants of ESS in unlisted companies will be able to invest without the unlisted company being required to comply with the Corporations Act 2001 laws in respect of a business offering shares and financial products to retail clients; and
  • Further regulatory relief to be extended to independent contractors receiving interests for nil consideration.

Please see the following link for the CAANZ highlights and key measures from the budget. As always, if you have any queries in how the budget will impact you and your business, please reach out to your WMS team. 

Federal Budget 2022-23 – Superannuation | CA ANZ (charteredaccountantsanz.com)

Should you have any questions, please do not hesitate to contact our office on (07) 5556 3300 or info@wmssolutions.com.au