CCH Parliament Federal Budget
Tax & AccountingLegalComplianceMarch 29, 2022

CCH Parliament Report Summary - Australia Federal Budget 2022-2023

The Treasurer delivered the Federal Budget on Tuesday 29 March 2022. According to the Government’s official Budget 2022-23 website the Government’s economic plan has helped Australia weather the biggest economic shock since the Great Depression, outperforming the performance of all major advanced economies. Their statement goes on to say: the economy has rebounded strongly, the labour market is robust, and Australia’s health outcomes are among the best in the world.

This Budget marks the next stage in leading Australia's economy into the future.

A Budget Overview and summary of the Budget Key Initiatives, prepared by the Wolters Kluwer CCH Parliament team based in Parliament House, Canberra can be found below. 

Budget Overview 

Budget outcome

The Budget shows that since MYEFO, the estimated underlying cash balance has improved by $103.6 billion over the 5 years to 2025-26. According to the Budget Papers the Underlying Cash Balance for 2021-22 (current year) is forecast at $79.8 billion and $78 billion in 2022-23. This compares with the forecasts in the Mid-Year Economic and Fiscal Outlook (MYEFO) of $99.2 billion and $98.8 billion.

Economic growth

The outlook for real GDP has strengthened, with growth forecast to be 4¼ per cent in 2021-22 and 3½ per cent in 2022-23, before moderating to 2½ per cent in 2023-24.  MYEFO had forecast economic growth of 3 ¾ per cent in 2021-22, revised down from the 2021 Budget forecast of 4 ¼ per cent.

Employment and unemployment

The Budget says the unemployment rate is expected to continue to fall over the next few quarters, 

Temporary fuel excise relief

The Budget announced the Government will reduce fuel excise by 50 per cent for 6 months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.

One-off cost of living tax offset

From 1 July this year, over 10 million low and middle-income earners will receive a one-off $420 cost of living tax offset. 

Low and Middle Income Tax Offset

The Government is extending the Low- and Middle-Income Tax Offset in the Budget.

Cost of living payment for pensioners and benefit recipients

The Budget provides a one-off, tax-exempt payment of $250 to eligible pensioners, welfare recipients, veterans and concession card holders. It will be paid automatically to 6 million people at a cost of $1.5 billion. The payment will be made in April 2022.

Small business cash flow boost

Treasurer Josh Frydenberg announced changes to the way business tax bills are calculated (the “uplift factor”), meaning regular business tax instalments would be calculated based on the previous year plus 2 per cent instead of the 10 per cent that would be added under current legislation.

Tax collections

The Budget estimates that total tax collections in 2021-22 will be $512.5 billion, an increase of 8.2 per cent of its revised estimate of tax collections in 2021-22.

Technology Investment Boost and Skills and Training Boost 

The Government announced in the Budget it is supporting small businesses to digitalise their operations and upskill their employees by introducing a Technology Investment Boost and a Skills and Training Boost. 

Aged care

The Budget announced a further $468.3 million to continue implementing the Government’s response to the Royal Commission into Aged Care Quality and Safety. This builds on the record $17.7 billion investment in aged care announced in the 2021-22 Budget.

Boosting Apprenticeship Commencement wage subsidy extended

The Government announced an expansion of its apprenticeship and training schemes in the Budget.

Expansion of Home Guarantee Scheme 

Ahead of the Budget the Government announced an expansion of its Home Guarantee Scheme.

Superannuation

Ahead of the Budget Treasurer Josh Frydenberg announced the Government will extend the 50 per cent reduction to minimum superannuation drawdown requirements for retirees into the next financial year.

$17.9 billion infrastructure spend

Ahead of the Budget the Treasurer and Prime Minister jointly announced a $17.9 billion investment in infrastructure across Australia.

In a joint announcement also with Deputy Prime Minister Barnaby Joyce and the Minister for Communications, Urban Infrastructure, Cities and the Arts Paul Fletcher, the Prime Minister and

Treasurer announced there would be $17.9 billion committed towards new and existing infrastructure projects in the infrastructure pipeline the Budget.

The Budget’s key initiatives

The Budget’s headline measures are designed to address cost of living pressures through a temporary halving of fuel excise and a one-off cost-of-living payment for low- and medium-income earners.

The measures are:

  • A temporary and targeted cost of living package, including a $420 cost of living tax offset for low- and middle-income earners and a $250 cost of living payment for eligible Australian pensioners, welfare recipients, veterans and concession card holders.
  • A 50 per cent reduction in petrol and diesel excise for 6 months that will deliver an average benefit of around $300 to households with at least one vehicle.

One-off cost of living tax offset

From 1 July this year, over 10 million low and middle-income earners will receive a one-off $420 cost of living tax offset. Combined with the Low and Middle Income Tax Offset (LMITO), eligible low- and middle-income earners will receive up to $1,500 for a single income household, or up to $3,000 for a dual-income household.

For eligible pensioners, welfare recipients, veterans and eligible concession card holders the payment will be $250 and made in April 2022. This payment will help 6 million people, at a cost of $1.5 billion.

More than half of those who will benefit are pensioners. The Budget says this is on top of the higher income support payments from existing indexation arrangements. Income support payments increased by 2.1 per cent in March 2022, benefiting almost 5 million Australians. The Age Pension, Disability Support Pension and Carer Payment rates increased by more than $20 a fortnight for singles and $30 a fortnight for couples. 

Temporary fuel excise relief

The Budget announced the Government will reduce fuel excise by 50 per cent for 6 months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.
“Fuel subject to a lower excise rate is expected to flow through to the majority of service stations and Australian consumers within a few weeks as stations replenish their stocks,” the Budget papers said.

federal budget 2022-2023
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