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2022 Federal Budget Update

On the 29th of March 2022, the 2022-2023 Federal Budget has been released. In this article, I have summarised the main points for you, in an easy and comprehensible way 🙂

For Business Owners
– Small companies will see a tax reduction, from 30% to 25%.
– Additional tax discount for small businesses from 5% (2015-2016) to 16% (2021-2022) with a cp of $1,000.
– GDP reduction, with $1.85 billion in cash flow to support taxpayers (small businesses).
– Businesses with an annual turnover of less than $5 billion will be able to write-off assets instantly until June 2023.
– Companies with a turnover inferior of $5 billion will be able to offset losses against previous tax profits to generate refunds (yey!) until 30 June 2023.
– Business are encouraged to boost productivity through technology (called the Digital Economy Strategy). This strategy will allow a 120% tax deduction for expenses and depreciating assets to support digital adoption (cloud-based services, cyber security) with a cap of $100,000 per year of eligible expeditures.
– New bonus for small businesses with a $50 million turnover (20% deduction for the cost of depreciating digital assets, up to $100,000 per year).

For Employees
– New bonus of 20% deduction for the cost of external trainings registered with businesses with a turnover less than $50 million per year.
– The boost will apply to eligible expenditures incurred until 30 June 2024.
– For eligible expenditures incurred by 30 June 2022, the boost will be claimed in tax return for the following year (2022-2023).
– For eligible expenditures incurred between 1/7/22 and 30/6/23, the boost will be claimed in that same financial year.
– $365.3 million will be invested to support wages for new apprenticeships programs, to support an extra 35,000 apprentices/trainees.
– $2.8 billion will be invested to support existing trainees/apprentices over the next 5 year.
– Super Contribution (SGC) increases from 10% to 10.5% in 2022-2023, and it will continue to increase 0.5% each year until 2026.
– Removal of the $450 monthly threshold for Super contributions, this means that super will be paid regardless of how much an employee earns per month.

Other Grants
– $2.2 billion will be invested as follow: $243 million to support universities to boost development & research; $1.6 billion to the Australia’s Economy Accelerator; $150 million to expand CSIRO’s Main Sequence Ventures which will invest in companies linked to research & development.

Individuals
– Assistance for homes buyers: first home buyers (eligible) will need a deposit of %5, and single parents of only 2%.
– Petrol and diesel excise will be cut to 22.1 cents per litre (it is currently at 44.2 cents per litre).
– The First Home Buyers Saver Scheme has changed: the amount of voluntary contributions can be realised up to $50,000.

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