Shuffling the Deck: 2022-23 Budget 2.0

Categories: ATO, Budget, General, NewsPublished On: October 26th, 2022257 words

Shuffling the Deck: 2022-23 Budget 2.0

Last night the Treasurer, Jim Chalmers, handed down his first Federal Budget. Given the rapidly escalating economic risks – a deteriorating global growth outlook, rising inflation and structural spending pressure, he promised a “solid and sensible budget”.

There is nothing in this Budget that would create a UK style crisis. The stage 3 tax cuts legislated to commence on 1 July 2024 are not mentioned, and most funding initiatives appear to be a reallocation of previous Government initiatives. And, the commodity-driven $54.4 billion improvement in tax receipts has largely been banked, not spent.

Key announcements included:

  • The Budget bottom line is to improve now, but worsen later; tough decisions are still to come
  • No change to legislated Stage 3 tax cuts for individuals subsidy increase
  • Added flexibility and an expansion of Paid Parental Leave
  • Aged care reforms
  • Change to the taxation of off-market share buy-back by listed companies
  • The scrapping of the initiative to self-assess the effective life of intangible assets
  • Scrapping of the announced but not legislated 3-year audit cycle for SMSFs
  • Energy grants for SMEs (but no detail yet)
  • Tightening of the thin cap rules and the denial of deductions for intangible assets between related parties in certain circumstances
  • More cash to the ATO to pursue personal income tax non-compliance and multi-nationals
  • More funding for the Tax Practitioners Board to pursue dodgy tax agents

With seven months before the 2023-24 Budget released in May 2023, this Budget is a shuffling of the deck, not a new set of cards.

To read the Federal Budget Overview, click here.

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