2022-23 Federal Budget Breakdown

Last night (Tuesday, April 29), Treasurer Josh Frydenberg handed down the 2022-23 Federal Budget. The 2022-23 Federal Budget is centred around delivering cost of living relief, supporting small businesses faced with higher operation costs, job creation and skill development.

How will it affect your household and your business?

Business

Small Business – Skills and Training Boost
Businesses with an annual turnover of less than $50 million will have access to a new bonus. They will be able to claim an additional 20 per cent deduction on the cost of external training courses delivered to their employees by registered Australian providers.

Claims for expenditure incurred before June 30 2022, will be included in tax returns for the year ended June 30 2023. Expenditure after June 30 2022, will need to be included in the tax return for the financial year in which the expenditure is incurred.

Small Business – Technology Investment Boost
To encourage small businesses (with a turnover of less than $50 million) to go digital, the Government announced a new $1 billion Technology Investment Boost. Eligible businesses will have access to an additional 20% deduction for the cost of expenses and depreciating assets that support digital uptake. This includes technologies such as cloud-based computing, e-invoicing, cyber security, and web design. A $100 spend will equate to a $120 deduction.

Similar to the Skills and Training Boost, claims for the Technology Investment Boost incurred before June 30 2022, will be included in tax returns for the year ended June 30 2023. Expenditure after June 30 2022, will need to be included in the tax return for the financial year in which the expenditure is incurred.

Apprentice and Trainee Measures
With more than a quarter of Australian employers employing an apprentice or trainee, the Government announced they will continue to invest in apprenticeships to ensure businesses have the skilled workforce they need.

The Australian Apprenticeships Incentive System will see additional funding introduced to provide support to both employers and apprentices. This will include $5,000 payments to new apprentices (over two years) and up to $15,000 in wage subsidies for employers who take them on.

Temporary Full Expensing 
Temporary full expensing was introduced to allow eligible businesses to claim immediate deductions for costs relating to depreciating assets. No extension was announced in the Budget, and at this stage, it is due to expire on June 30 2023.

Households

Temporary 50% reduction in fuel excise
To lessen the pain felt at the petrol pump, the excise and excise equivalent customs duty rates for petrol, diesel and all other fuel and petroleum-based products (except aviation fuel) will be halved for six months – effective immediately. The rates will be reduced from 44.2 cents to 22.1 cents per litre for petrol and diesel.

The lower fuel rate should be seen in most service stations within the next couple of weeks as fuel stock is turned over. This means a benefit of approximately $300 over the reduction period for the average Australian household with at least one vehicle.

The halving of fuel excise rates will end at midnight, September 28 2022.

The one-off cost of living tax offset
For the 21-22 income tax year, there will be a one-off $420 increase to the low and middle-income tax offset (LMITO). The combined $420 and LMITO will give eligible taxpayers a tax reduction of up to $1,500 for a single income household or $3,000 for a dual-income household.

The LMITO has not been extended and will cease on June 30 2022.

The one-off cost of living payment
To help meet the increases in the current cost of living, the Government is providing a one-off,  tax-exempt payment of $250. This will be paid automatically to all eligible pensioners, welfare recipients, veterans and eligible concession card holders from April 22 2022.

Superannuation
The Government will be extending the 50% reduction of the minimum super drawdown requirements for account-based pensions and similar products until June 30 2023.

Note: The cost of living pressure measures are likely to have bipartisan support and pass Parliament in the next few days. However, business and other measures are unlikely to pass Parliament before the federal election.

We will continue to monitor for and provide updates on the 2022-23 Federal Budget, but should you have any questions in the meantime, please do not hesitate to contact the office.