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.