Handed down on 29 March, the 2022-23 Federal Budget deficit is estimated to be $78 billion falling to $43.1 billion in 2025-26.
GDP growth is forecast to be 3.5% in 2022-23 and 2.5% for the remainder of forward estimates. Net debt is predicted to increase to $865 billion (33.1% of GDP) by June 2026.
Unemployment is also expected to fall below 4% in 2022.
Here are the key takeaways from the Budget:
1. 50% reduction in fuel excise for 6 months
Fuel excise is set to be cut in half for 6 months from 30 March 2022. This will equate to 22.1 cents per litre in excise for petrol and diesel.
2. One-off cost of living tax offset
There will be a one-off $420 increase to the low and middle income tax offset (LMITO) for 2021-22 income tax year. The combined $420 and LMITO will give eligible taxpayers a tax reduction of up to $1,500 for a single income household, or $3,000 for a dual income household.
3. Small business digitalisation
New $1 billion Technology Investment Boost to encourage small businesses to go digital. Small businesses with an annual turnover less than $50 million will be able to deduct a bonus 20% of the cost of expenses and depreciating assets that support digital uptake. This includes portable payment devices, cyber security systems or subscriptions to cloud-based services. A $1 spend will equate to a $1.20 deduction.
4. $250 cost of living payment to welfare recipients
The Government is providing a new one-off, income tax-exempt payment of $250 to help with increases in the current cost of living. It will be paid automatically to all eligible pensioners, welfare recipients, veterans, and eligible concession card holders in April 2022.
5. Small business training bonus
Small businesses with an annual turnover less than $50 million will have access to a new bonus 20% deduction for the cost of external training courses delivered to their employees by providers registered in Australia. A $1 spend will equate to a $1.20 deduction.
6. $2.8bn for apprenticeships
New $2.8 billion investment to increase take up and completion rates for apprenticeships including $5,000 payments to new apprentices and up to $15,000 in wage subsidies for employers who take them on.
