The 2022 - 2023 Federal Budget Snapshot (Without Political Comments)

With all the commentaries in the press and around town about this Budget being the “election Budget”, here’s a summary of what was announced, but without any political spins.



For Individuals

• A one-off payment of $250 will be made to those receiving government support, and some self-funded retirees, to assist with increased costs of living. This payment is tax free, and will not count as income when assessing government support payments.

• The Low and Middle Income Tax Off-set has been increased by $420, taking the total off-set amount to a maximum of $1,500 for individuals, and $3,000 for couples who earn up to $126,000 pa.

• The Medicare thresholds for low-income earners will increase as follow:

• For singles – from $23,226 to $23,365

• For single seniors and pensioners – from $39,167 to $39,402

• For family and for families of seniors and pensioners – from $51,094 to $51,404

• For family with dependent children or student – the threshold will increase by $3,597 for each child, instead of the current $3,619.

• From 1 July 2021, costs of COVID-19 tests to attend a workplace will be tax deductible. However, it is unclear at the moment as to whether this extends to employees who were able to work from home.

• Reduction of fuel exercise of 22 cents per litre for 6 months, commencing 30 March 2022.

• The Home Guarantee Scheme has been extended, to assist people to purchase a home with smaller deposits, and avoid the need for lenders mortgage insurance. A new scheme has also been introduced for regional areas, to assist people purchase or construct a new home in regional areas with a 5% deposit.

For Businesses

• Small businesses (with aggregated turnover of up to $50M) who pay for external training courses for their employees from Budget night to 30 June 2024 will be able to claim 120% of the amount spent as tax deductions. For expenditures incurred between Budget night and 30 June 2022, the extra 20% will be able to be claimed in the 2022 – 2023 tax return.

• Small businesses will also be able to claim 120% of the costs incurred to adopt new technology (e.g. portable payment devices, cyber security systems, cloud-based services etc.) between Budget night, and 30 June 2023. However, there is an annual cap of $100,000 in eligible spending. Similar to the training costs mentioned earlier, eligible costs incurred between Budget night and 30 June 2022 will be eligible for the extra 20% deduction in the 2022 – 2023 income tax return.

• Businesses who pay for their employees’ COVID-19 tests will have these costs exempted from Fringe Benefits Tax.

• From 1 January 2024, businesses will be able to choose their PAYG instalments based on their financial performance, and not the predetermined amount or rate set by the ATO.

• Also from 1 January 2024, businesses who have to lodge Reportable Taxable Payments reports will be able to lodge these reports on the same lodgement cycle as their Activity Statements.

• The following COVID-19 business grants are now non-assessable non-exempt income for tax purposes:

• New South Wales – Accommodation and Support Grant, Commercial Landlord Hardship Grant, Performing Arts Relaunch Package, Festival Relaunch Package, and 2022 Small Business Support Program

• Queensland – 2021 COVID-19 Business Support Grant

• South Australia – COVID-19 Tourism and Hospitality Support Grant, and COVID-19 Business Hardship Grant.

• The uplift factor for the annual GDP uplift for PAYG and GST instalments will be reduced from 10% to 2%.

• Employers or group training organisations who takes on an apprentice or trainee up until 30 June 2022 can gain access to:

  • 50% of the eligible apprentice’s wages in the first year, capped at $7,000 per quarter for each apprentice

  • 10% of the eligible apprentice’s wages in the second year, capped at $1,500 per quarter for each apprentice

  • 5% of the eligible apprentice’s wages in the tird year, capped at $750 per quarter for each apprentice.

For Superannuation

The 50% reduction in minimum drawdown for superannuation pensions has been extended to 30 June 2023.

For The Hunter

• $1bn for faster rail upgrade for the Sydney to Newcastle line.

• $100m to commence the hydrogen hub.

We hope that this summary is useful and as always, please contact our friendly team at H & M Accountants if you have any questions, or are unsure as to how these announcements affect you.