Financial Institutions and Markets

Treasurer Josh Frydenberg last night handed down his latest Federal Budget. The key focus of the Budget was relieving the cost-of-living pressures on Australian families and was light on key reforms or legislative changes in comparison to Budgets handed down in years past. The governments’ generosity should be taken with a pinch of salt as it was delivered with the election looming around the corner.

The cost-of-living relief offered by the government has been made through temporary measures and one-off cash payments which should be well received by the Australian public.

A summary of the key measures is as follows:

Individuals

• Income tax rates and thresholds to remain the same in 2022-23 with the next round of income tax cuts to commence in 2024-25 at this stage;
• Pensioners, welfare recipients, veterans and concession card holders will receive a one off cash payment of $250 to be delivered in April 2022;
• The Low and Middle Income Tax Offset (LMITO) to be increased by $420 to increase ceiling on the tax offset to $1,500. Approximately 10 million taxpayers are expected to benefit to some degree; and
• The excise on petrol, diesel and other fuel and petroleum-based products will be reduced by 50% for a six month period (commencing on 30 March 2022 and ending on 28 September 2022).

Small Business

• Small businesses with an aggregated annual turnover less than $50 million will have access to a 20% bonus tax deduction for the cost of external training courses delivered to their employees;
• Small businesses with an aggregated annual turnover less than $50 million will be able to deduct a bonus 20% of the cost of business expenses and depreciating assets that support digital uptake, up to an annual cap of $100,000. Eligible expenditure includes technological investments such as portable devices, cyber security systems and subscriptions to cloud based services; and
• Apprentice Wage Subsidy Extension – the Boosting Apprenticeship Commencement and Completing Apprentice Commencements wage subsidies will be extended by 3 months to 30 June 2022.

COVID-19 Specific

• The government has announced that it will extend the measure which enables COVID-19 business support payments to be treated as non-assessable, non-exempt income for tax purposes until 30 June 2022.

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