Federal Budget 2022 – Summary of announcements

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The former Federal Treasurer delivered his last Federal Budget in the Parliament on 29 March 2022. Economists have commented that former Treasurer Frydenberg has delivered a budget with various cost of living reduction measures for the public, as well as some initiatives of interest to businesses across the country.

Following the enormous support packages to help Australia through COVID-19, the budget sought to strike a balance between pre-election spending and responsible long-term economic management. While much of the media coverage is focused on the consumer-facing measures such as the cut to petrol excise, the budget contained schemes relevant to many family and privately owned businesses and companies. Budget highlights summary:

For Individuals

1. The fuel excise tax will halve from 44.2 cents per litre to 22.1 cents per litre for six months, coming into effect from Budget night 2022.

This will help alleviate the impact of rising oil prices as a result of the

Ukraine conflict. 2. A one off $420 cost of living tax offset for workers eligible for the low- and middle-income tax offset will come into effect from 1 July 2022 to help manage rising living costs. 3. Pensioners and other welfare recipients will receive a $250 one off cash payment, to be paid within weeks of the 2022 Budget announcement. 4. The Deposit Guarantee Scheme will more than double to 50,000 places per year. The scheme cuts the deposit required to buy a home to 5%, with the Federal Government guaranteeing the other 15%. There will be places set aside for single parents – either buying their first properties or trying to re-enter the housing market. Eligible single parents can receive a guarantee

with a deposit of just 2%. 5. The First Home Super Saver

Scheme (FHSSS) will be tweaked.

It will allow first home buyers to withdraw $50,000 from their super, up from $30,000. This scheme allows first home buyers to save a deposit by contributing to super while paying less tax.

For Businesses

1. The existing instant asset write off rules for businesses with turnover or income of less than $5bn have been extended to 30 June 2023. 2. $10.4 million to enhance and redesign the Payment Times

Reporting Portal and Register, making it easier to view the payment practices of Australia’s largest organisations. 3. $5.6 million for a dedicated small business unit in the Fair Work

Commission, making it easier for them to meet workplace obligations. 4. $8 million to the Australian Small

Business and Family Enterprise

Ombudsman, making it easier to access expert advice. 5. $4.6 million to extend Beyond

Blue’s NewAccess for Small

Business Owners program, making it easier to access mental health support. 6. The Technology Investment

Boost aims to reduce the cost of going digital, supporting business investment in digital capability. a. Small businesses with an annual turnover of less than $50 million can claim a bonus 20 per cent deduction for the cost

of expenses and depreciating assets, up to $100,000 of expenditure per year. b. Eligible expenditure includes items such as portable payment devices, cyber security systems and subscriptions to cloudbased services. c. The boost will apply to expenditure incurred from 29

March 2022 until 30 June 2023.

7. The Skills and Training Boost encourages small businesses to train new staff and upskill existing staff, helping them to be innovative and grow. a. Small businesses can claim a bonus 20 per cent deduction for the cost of external training courses delivered to employees in Australia or online, by providers registered in Australia. b. This will apply to expenditure incurred from 29 March 2022 until 30 June 2024. 8. The Government will invest $2.4

billion in a new Australian

Apprentices Incentives System

(AAIS), with targeted incentives to employers, apprentices, and trainees. a. From 1 July 2022, the AAIS will focus government investment on priority occupations that face skills shortages and will be introduced in two phases. b. It will provide wage subsidies for employers in priority occupations and hiring incentives for employers in nonpriority occupations.

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c. Apprentices and trainees in priority occupations will also receive a direct payment of up to $5,000 over two years to assist with the cost of undertaking an apprenticeship. d. In the second phase, the AAIS will shift to supporting occupations in demand, with a hiring incentive of up to $4,000 to be provided for employers in priority occupations, as well as a new Australian Apprentices Training Support Payment of up to $3,000 paid directly to apprentices in priority occupations. 9. Cash Flow support, the GDP uplift rate that applies to PAYG income tax and GST instalments will be reduced to 2 per cent for the 2022-23 income year. a. This will mean lower tax instalments, delivering $1.85 billion in cash flow support for 2.3 million small to medium businesses, sole traders and others who use the instalment amount method. 10. Tourism sector - $60m Tourism

Marketing Recovery Plan to attract international tourists following the reopening of Australia’s border. 11. A $2m employment and skills online platform will be established to match job seekers with tourism employers while also training and upskilling staff in tourism. Health 1. An additional $6bn will support

Australia’s COVID-19 health response, including preparation for winter. 2. Medicare will cover new services such as Telehealth. 3. The Pharmaceutical Benefits

Scheme threshold will reduce so people reach the safety net sooner. 4. Mental health services receive an extra $547m. 5. The National Disability Insurance

Scheme (NDIS) will provide $33.9bn to over 500,000 Australians in 2022-23, growing to $44.6bn in four years. 6. Education 1. Additional $3.7bn will boost skills training in priority areas. 2. Support for apprenticeships will grow by $2.8bn over five years. 3. $2.2bn to support university and industry partnerships and $52.8m to help build life and employment skills in disadvantaged young

Australians.

Sustainability

1. $1bn allocated to protect the

Great Barrier Reef and $170m is earmarked for threatened species, habitat restoration and tree

planting.

2. $26.8m will improve conservation and management of Australia’s national parks and $839.9m will support research and environmental management of Antarctica. 3. $192m will improve environmental regulation. 4. $83.1m will build waste and recycling capabilities.

Women

1. $1.3bn will be spent on ending domestic violence against women and children. 2. $330.6m has been set aside for female health. 3. $482m to help women advance their careers, of that $56.2m will assist women transition to jobs in technology and manufacturing. $40.4m will support more women into senior roles and leadership positions. 4. $18.5m will progress gender equality in the workplace and reduce the gender pay gap.

Manufacturing

1. Additional $1bn in investment towards the Modern Manufacturing

Strategy. Half of this additional funding will support manufacturing activity in regional Australia. 2. The government will establish a

mRNA vaccine manufacturing

capability in Victoria, providing priority access to mRNA vaccines, supporting research, and preparing

Australia for possible future pandemics. 3. Rural 1. $1.3bn will improve regional telecommunications. 2. $150.3m will support medical training in regional and rural

Australia. 3. $55m will boost aeromedical outreach services to reach isolated locations. 4. $7.4bn will increase water security. 5. The government will establish up to 20 new childcare services in regional and rural areas.

Defence

1. Defence personnel will grow by 18,500 by 2040. 2. More than $10bn has been allocated to future naval infrastructure 3. $3.5bn for up to 75 new tanks and armoured vehicles. 4. The Budget earmarked an investment of $9.9bn in Australia’s

intelligence and cyber capabilities.

5. An extra $257.1m has been set aside for anti-terrorism and serious and organised crime prevention.

Aged Care

1. Spending on aged care will grow to $29.8bn in 2022-23. There are more home care packages, extra care time per day for older Australians in residential care and new training places for aged care workers.

Infrastructure Spending

1. Diversify growing regional areas, including through $7.1 billion for

transformative infrastructure

projects, including in four regions primed for growth. a. This includes committing to build $17.9 billion of priority road and rail infrastructure. 2. A new $2 billion Regional

Accelerator Program will be created to drive growth and productivity in regional areas. 3. $6bn in disaster relief and recovery as a result of the floods in

Queensland and New South Wales. 4. $1.2bn will be spent to develop

Australian made satellites and enhance our space capability.