Federal Budget Summary

Posted 26 Oct '22

Federal Budget Summary

The Federal Treasurer, Dr Jim Chalmers, handed down the Labor government's first Federal Budget on 25 October 2022. Here are the key highlights of the tax and accounting measures announced.

Businesses

• Temporary Full Expensing – Unfortunately there was no announcement to continue the temporary full expensing which is currently legislated to end on the 30 June 2023.

• COVID Grants Exempt - A number of Victorian and ACT based business grants relating to the COVID-19 pandemic will be non-assessable non-exempt income for tax purposes.

• Energy Efficient Grants - Grants will be provided to small and medium-sized businesses to fund energy efficient equipment upgrades.

• Off Market share Buy Backs - The tax treatment for off-market share buy-backs undertaken by listed public companies will be aligned with the treatment of on-market share buy-backs.

• Intangible asset depreciation - The 2021-22 Budget measure to allow taxpayers to self-assess the effective life of intangible depreciating assets will not proceed.

• Electric vehicles - Electric vehicles under the luxury car tax threshold will be exempt from fringe benefits tax and import tariffs.

• Skills Shortage – Fee Free TAFE places were announced along with changes to the migration program.

Individuals

• Personal Income tax rates and thresholds – Budget did not announce any changes to the Stage 3 personal income tax cut that are set to commence from 1 July 2024.  Also the The Low and Middle Income Tax Offset (LMITO) will not be extended. The 21/22 income year is the last year available, however the Low Income Tax Offset (LITO) will still apply.

• Aged Pension - The amount pensioners can earn in 2022-23 will increase by $4,000 before their pension is reduced, supporting pensioners who want to work or work more hours to do so without losing their pension. Also to incentivise pensioners to downsize their homes, the assets test exemption for principal home sale proceeds will be extended and the income test changed.

• Seniors Heath Card - The income threshold for the Commonwealth Seniors Health Card will be increased from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.

• Paid Parental Leave and Child Care Subsidy - The Paid Parental Leave Scheme to be expanded from 1 July 2023 and the Child Care Subsidy (CCS) rate to be increased.

• Crypto currencies - Legislation will be introduced to clarify that digital currency (or crypto currencies) will not be treated as foreign currency for income tax purposes.

• Housing measures - Regional First Home buyers guarantee Scheme and other housing measures announced.

Superannuation

• Downsizer contributions eligibility - Eligibility to make a downsizer contribution to superannuation will be expanded by reducing the minimum age from 60 to 55 years.

If you would like to know more information about any of these measures, please do not hesitate to contact our office.

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