‘Don’t Rock The Boat’ Budget 2022-23

Posted On April 1, 2022

You may have missed it, but the Budget was announced on Tuesday night (29th March 2022). As this is an election year, the budget was moved forward and it took many people by surprise. This was more due to the fact that they forgot that it was happening as opposed to it’s content. It certainly made less headlines than Will Smith, and packed less of a punch too.

A brief summary of the main talking points are below. For those who need more details there is also a report on all that was announced in the budget.

To Download a copy of our Client Guide to all the announcements in the 2022-23 Budget please click here.

Cost of living payments

The main focus of the Budget was to seek to ease some of the concerns around consumer confidence and to boost it with several temporary measures, most notably:

  • An additional one-off payment of $420 for the 10 million taxpayers eligible for the Low and Middle Income Tax Offset (LMITO). Taxpayers earning up to $126,000 were previously eligible for payments between $255 and $1,080 when they file their tax returns at the end of this financial year. Under the changes, they will now receive between $675 and $1,500.
  • A temporary reduction in fuel excise duty. The 22.1 cent/litre cut will provide some immediate relief and be in place for the next six months. In reality the Government can’t sustainably address the underlying reasons why petrol prices have risen about 27 cents/litre1 since the start of March. 
  • A one-off $250 payment to pensioners and welfare recipients to offset some of the rising cost of living pressures.

Incentives for small business

From a Small Business perspective, there were some new policies that will directly benefit small businesses including:

  • New tax incentives to help small businesses, with turnover of less than $50 million/year, adopt digital technology and train and upskill employees.

– Until June 2024 for every $100 a small business invests in external training courses for their employees they will get a $120 tax deduction (Skills and Training Boost). 

– Until June 2023 for every $100 a small business spends on new digitalising their business (for items such as cloud accounting, online security and eInvoicing software) they will get a $120 tax deduction up to $100,000/year (Technology Investment Boost).

  • An extension of the current wage subsidy programs around apprenticeships, a new streamlined Australian Apprenticeships Incentive System and a new program to help lift youth employment (ReBoot). 
  • Measures around the PAYG system designed to improve short-term cashflow for small businesses and enhance the prefill of some income tax returns and activity statements. 
  • Changes to procurement rules to make it easier for small businesses to win contracts and have government-invoices paid more quickly.
  • Additional funding for the Fair Work Commission to establish a dedicated unit to support small businesses, including with unfair dismissal and general protections disputes.
  • An additional $480 million to improve wireless NBN access for households and businesses in regional and remote areas. 

One long standing policy that has been repeatedly extended is the instant asset depreciation program. This was not extended in the Budget and could end on 30 June 2023. 

Where do we go from here?

Overall, this Budget is designed to provide relief from cost of living pressures and minimise ‘losers’ from any policy decisions. Attention will now turn to next week’s Reserve Bank Board meeting to understand how this Budget may impact the Bank’s thinking around interest rates. Then the focus will be firmly on the timing of the federal election, when we will next hear from Treasury in its Pre-Election Fiscal Outlook.

1 Calculated using national average price of unleaded 95 petrol published on drive.com.au.