Last night the Treasurer, Josh Frydenberg, handed down the Federal Budget. In delivering his Budget, he said, “events abroad are pushing up the cost of living at home” as he announced “temporary, targeted and responsible” financial support.
With an election expected on 14 May, as predicted, this stimulus Budget includes initiatives to address the rising cost of living and financial support and incentives for small businesses, alongside major spending on infrastructure, health and defence.
A $78 billion underlying cash deficit is forecasted for 2022-23, $20.9 billion better than forecast in the December 2021 Mid-Year Economic Fiscal Outlook.
The key announcements are:
An $8.6 billion budget cost-of-living package, including halving the petrol tax, a $420 tax bonus and $250 one-off cheques.
- Fuel excise will be cut in half for six months from 44.2 cents down to 22.1 cents.
- The Low and Middle Income Tax Offset has been increased for 2021-2022 by $420.
- Pensioners, welfare recipients, veterans and concession cardholders will receive a one-off payment of $250 in April 2022.
Apprentices and Small Businesses
- From July 1, apprentices employed in “priority industries” will be eligible for up to $5,000 over two years. Their employers will be able to seek up to $15,000 in wage subsidies.
- Until June 30 2024, a 120% tax deduction for small businesses to upskill employees and encourage digital adoption.
- Confirmation for small and medium businesses, the GDP uplift factors will be limited to 2% in respect of instalments that relate to the 2022-23 income year.
- The 50% reduction of the minimum superannuation pension drawdown requirements will be extended for the 2022-23 income year.
- Super Guarantee rate will continue to rise to 10.5% for 2022-23. The Budget did not contain any change to the legislated Super Guarantee rate rise from 10% to 10.5% for 2022-23.
- Extra funding for COVID-19 ($6 billion), mental health (further $547 million over 5 years), aged care (further $468.3 million over 5 years) and $39.6 billion to continue the NDIS program.
- $2.4 billion over the next 5 years to add new Pharmaceutical Benefit Scheme items, including drugs targeting various cancers, cystic fibrosis, COVID treatments and other chronic or terminal illnesses, and a further $525.3 million to reduce the PBS safety net threshold from July 1 2022.
Paid Parental Leave (new laws set to be introduced by March 1, 2023)
- All parents (or partners) will be able to access a streamlined 20 weeks of leave to be shared as they choose over two years.
Women and Families
- $1.3 billion to end violence against women and children.
- $23 million to help families who have experienced stillbirths or miscarriages.
- $482 million to provide women with greater flexibility and choice about managing work and care.
- From May 1, the drug Trodelvy will be added to the PBS. This will save breast cancer patients who require it on average $80,000 per treatment.
Climate Change and the Environment
- Expansion of the Patent Box regime to the low emissions technology and agricultural sectors.
- Responses to climate and natural disaster impacts, alongside continued focus on low emissions technology and energy security
- Significant funding allocated to build resilience into Australia’s infrastructure networks.
- A range of measures to support flood-affected communities with total support to exceed $6 billion.
Property Scheme Expanded
- Extension of the Home Guarantee Scheme to 50,000 places, more than double the current allotment, allowing more first home buyers into the market with a reduced deposit.
- From July 1, the maximum amount of voluntary super contributions that can be released under the First Home Super Saver Scheme toward a person’s budget will be increased from $30,000 to $50,000.
Mr Frydenberg also announced a $9.9 billion investment in Australia’s cyber security capabilities.
To read the Federal Budget Overview for further details, click here.