Similar to last year, returning to Budget surplus seems to be an ever-moving goal post. Some are saying that realistically it might be ten or so years, or even longer, before we get to that point.
Let’s talk stats. Spending over the past two years hit $343 billion on health and economic support alone. That has had a positive impact on many things, e.g. unemployment which is now sitting down at 4%. Spending remains a hefty 27% of GDP for the next two years, well above the cash coming in. This means we are relying on debt and with the price of debt rising, are dangers lurking around the corner? According to the Treasurer, inflation will peak this financial year sitting around 4.25% before easing to 3% next year and 2.75% the following year.
On Tuesday night, Treasurer Josh Frydenberg handed down the 2022-2023 Budget. This year we have seen Government support take a widespread approach, pointing focus on sectors that are in crisis and in high demand:
- Building infrastructure
- Reducing the cost of living
- Boosting the workforce
So who won this year out of the budget?
The Government cut the fuel excise in half effective midnight Budget night. This should save everyone approximately 22c a litre when they fill up. This is only for 6 months though, but I don’t think anyone is complaining.
Taxpayers & Businesses
- Low-and middle-income earners will receive an extra $420 back in their tax returns
- Low and middle tax offset is also back for another year, meaning up to $1,500 back for some
- 20% bonus deduction for the cost of expenses that support digital uptake.
- 20% deduction for cost of external training courses by registered providers for employees
- Up to $15,000 in wage subsidies continue to be available
A big change to the governments Paid Parental Leave (PPL) scheme is on the cards. Instead of offering two separate payments, the parents can now choose to split the leave between themselves in whatever way they would like. The government's also changing the scheme so that single parents will be able to access the full 20 weeks of leave and given the ABS estimated last year, that 81 per cent of single parents are women, it'll no doubt help potentially thousands of women. It's also adjusting the income test to include a household income threshold of $350,000 a year. This is expected to be in place by March next year, at a cost of $346.1 million over five years.
Barnaby Joyce has announced there'll be $7.1 billion over 11 years for a new 'Energy Security and Regional Development Plan'. The money will go towards co-investment with states and territories, or private companies, in everything from upgrading ports and roads to building dams and logistic hubs in north and central Queensland, the Hunter in New South Wales, the Northern Territory and the Pilbara region of Western Australia.
There is also $800 million in new money to improve mobile phone coverage in the bush.
Pensioners, carers, veterans, job seekers and other eligible concession cardholders, plus some self-funded retirees, will receive a one-off payment of $250. The extra cash is to help with the cost of living and will go to around 6 million people in the coming weeks.
First Home Buyers
The government is expanding its first home buyers 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, but it comes with rules on who is eligible and how expensive the houses can be.
The government's putting in $500 million dollars over the next five years to pay for the next stage of the National Mental Health and Suicide Prevention Plan. Australians on a mental health plan will again receive an additional 10 partially-Medicare subsidised visits to a psychologist - a measure first announced in the coronavirus pandemic.
There's a tax break on the way for farmers who make money by selling carbon credits. The change means carbon farming income can be treated like other primary production income for tax purposes.
Improving access to medicines, with $45.5 billion investment over 4 years, $2.4 billion additional new and amended PBS listings in this budget.
We wish you and your business every success!