Key initiatives include:
- A 6 month, 50% reduction in fuel excise with effect from midnight Budget night.
- A $420 cost of living tax offset for low and middle income earners from 1 July 2022.
- A one-off $250 economic support payment to some social security payment recipients.
It is also a Budget that drives digitisation. Not just to support innovation but to streamline compliance, create transparency and more readily identify anomalies. Beyond compliance, there is an opportunity capitalise on the benefits of the Government’s push towards innovation and investment in new technology.
If we can assist you to take advantage of any of the Budget measures, or to risk protect your position, please let us know.
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Here’s our top takeaways from this year’s budget
Temporary reduction in fuel excise
From: 12.01am 30 March 2022
As widely predicted, the Government will temporarily reduce the excise and excise-equivalent customs duty rate that applies to petrol and diesel by 50% for 6 months from Budget night. That is, the current 44.2 cents per litre excise rate will reduce to 22.1 cents per litre from midnight on 30 March 2022. However, the measure is subject to the passage of the enabling legislation so don’t expect to see a change right away.
The reduction extends to all other fuel and petroleum based products except aviation fuels.
At the conclusion of the 6 months on 28 September 2022, the excise and excise-equivalent customs duty rates revert to previous rates including any indexation that would have applied during the 6 month period.
The Australian Competition and ConsumerCommission (ACCC) will monitor the price behaviour of retailers to ensure that the lower excise rate is passed on to consumers.
The measure comes at a cost of $5.6bn.
Low and middle income cost of living tax offset increase
From: 1 July 2021 to 30 June 2022
The low and middle income tax offset(LMITO) currently provides a reduction in tax of up to $1,080 for individuals with a taxable income of up to $126,000.
The tax offset is triggered when a tax payer lodges their 2021-22 tax return.
For the 2021-22, the LMITO will be increased by $420 which means that the proposed new rates for individuals areas follows:
$250 cost of living payment
From: April 2022
A one-off $250 ‘cost of living payment’ will be provided to Australian resident recipients of the following payments and concession card holders:
- Age Pension
- Disability Support Pension
- Parenting Payment
- Carer Payment
- Carer Allowance (if not in receipt of a primary income support payment)
- Jobseeker Payment
- Youth Allowance
- Austudy and Abstudy Living Allowance
- Double Orphan Pension
- Special Benefit
- Farm Household Allowance
- Pensioner Concession Card (PCC) holders
- Commonwealth Seniors Health Card holders
- Eligible Veterans’ Affairs payment recipients and Veteran Gold Card holders.
The payments are exempt from taxation and will not count as income support for the purposes of any income support payment. An individual can only receive one payment.
Home Guarantee Scheme extended
The Home Guarantee Scheme guarantees part of an eligible buyer’s home loan, enabling people to buy a home with a smaller deposit and without the need for lenders mortgage insurance. The Government has extended two existing guarantees and introduced a new regional scheme.
Just prior to the Budget, the Government announced:
- First Home Guarantee – from 1 July 2022, an increase from 10,000 to 35,000 guarantees to support eligible first homebuyers purchase a new or existing home.
- Single parent Family HomeGuarantee - 5,000 guarantees each year from 1 July 2022 to 30 June 2025. The family home guarantee supports eligible single parents with children to buy their first home or to re-enter the housing market with a deposit of as little as 2%.
- Introduction of a Regional Home Guarantee. This guarantee will support eligible citizens and permanent residents who have not owed a home for 5 years (including non-first home buyers) to purchase or construct a new home in regional areas with a minimum 5% deposit areas (subject to the passage of enabling legislation).
Reduction in minimum superannuation drawdown rates extended again
The temporary 50% reduction in superannuation minimum drawdown requirements for account-based pensions and similar products has been extended to 30 June 2023.
$120 deduction for every $100 spent on technology
From: 7:30pm AEDT, 29 March 2022 until 30 June 2023
The Government intends to provide a 120% tax deduction for expenditure incurred by small businesses on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services.
The technology boost will be available to small business with an aggregated annual turnover of less than $50 million.
An annual expenditure cap of $100,000 will apply to the boost.
The boost for eligible expenditure incurred by 30 June 2022 will be claimed in tax returns for the following income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2023 will be included in the income year in which the expenditure is incurred. That is, the additional deduction available under this measure is expected to be claimed in the 2023 tax return.
Apprentice wage subsidy support extended
Just prior to the Federal Budget, the Government announced the extension of the:
- Boosting Apprenticeship Commencements wage subsidy, and
- Completing Apprenticeship Commencement wage subsidy.
Any employer (or Group Training Organisation) who takes on an apprentice or trainee up until 30 June 2022 can gain access to:
- 50% of the eligible Australian Apprentice’s wages in the first year, capped at a maximum payment value of $7,000 per quarter per Australian Apprentice,
- 10% of the eligible Australian Apprentice’s wages in the second year, capped at a maximum payment value of $1,500 per quarter per Australian Apprentice, and
- 5% of the eligible Australian Apprentice’s wages in the third year, capped at a maximum payment value of $750 per quarter per Australian Apprentice.