So what were the real takeaways from last night, and are any going to have a real impact on you? Let's dive into it...
The key takeaway from last night was that I missed out on pizzas and beers at the office; I was working from home, just saying.
With the year that was behind us, this year's budget returned to somewhat normal; a lot of fluff and bubbles, with announcements that, with some imagination, seem like they will do something; an election budget.
So what were the real takeaways from last night, and are any going to have a real impact on you? Let's see.
THE REAL IMPACT
During the peak of the pandemic last year, we saw gajillions of dollars thrown into the economy to support us through the "anticipated" worse of it. Much of these gajillions were directly funnelled into our pockets.
… that was last year. This year we've struggled to find too much in the budget that will equate to real folding cash.
As with the last budget, the marketing department within treasury have once again used a comparison to 2017-18 as an indicator of your tax savings – check it out their calculator here.
The marketing spin aside, the real and only tax savings for 2022 will be the "Low and Middle Tax Offset" (LMITO) which will remain in place for another year.
other miscellaneous items
- self-education – removing the exclusion of the first $250
- childcare – increased subsidies
- residency rules – simplifying for individuals
The majority of the business support announced last night was at a government and sector level. There was very little in it that we saw as having a real impact at the coalface. The notable exceptions were:
- temporary full expensing (extended) – for new depreciable assets, full cost; for existing, any improvements made after 6 October 2020 until 30 June 2023.
- temporary loss carry-back (extended) – companies with losses incurred in any years from 2019-20 to (now) 2022-23 can be carried back against profits made in or after 2018-19. You can request a refund upon lodgement of 2020-21, 2021-22 or 2022-23 tax returns.
- excise relief – increase in cap from $100,000 to $350,000 for small brewers and distillers.
other items of note
- not-for-profits – a requirement to report to ATO from 1 July 2023
- minimum SG threshold scrapped – superannuation guarantee payment required on every dollar, previously not required for employees earning less than $450 a month.
- employee share schemes – tax deferrals
- tax incentives – industry-specific incentives – biotech and digital games industry.
- increasing training places & supported apprenticeships
- ATO debt recovery – ATO debt recovery action can now be paused by the AAT.
What would a budget be without changing to superannuation:
- work test – repelled
- pension loan scheme – improving access and attractiveness of the voluntary, reverse mortgage scheme.
- downsizer contribution extension – one-off post-tax contribution of up to $300,000 from age 60.
THE INDIRECT (NOT-REAL) IMPACT
In the short term, for most, we see very little direct impact from the below measures. With some imagination, we can see how these may have longer-term benefits, but with the year that was, it's a long view.
For completion purposes, I have pulled details directly from the treasury marketing department, some of which are measures announced (and passed) in previous budgets.
Creating jobs and rebuilding our economy
- tax cuts for taxpayers – including as above and in previous budgets
- tax cuts for small to medium businesses – in previous budgets (from 30% to 25% for companies from 1 July 2021)
- extending tax incentives – full expensing and temporary loss carry-back
- global business and talent – little detail provided here, somewhat a moot point with border restrictions
- tax incentives - industry-specific incentives – biotech and digital games industry
- extending homebuilder (construction) and new home guarantee
- building skills – additional training paces and apprenticeships
- care workforce – training and expansion
Guaranteeing the essential services
This area of the budgeted focused on essential services including aged care, mental health, disability care and preschools; much of it on the back of royal commissions and past criticisms.
This was a big focus of this year's budget but a lengthy read.
Improving women's safety and economic security
This area of the budget focused on addressing safety issues and strengthening economic security for women.
Building a more secure and resilient Australia
This area of the budget was a lot of "blue-skying", focusing on national measures including energy, infrastructure, exports, manufacturing and security.
Certainly worth a read if you work with government or within these sectors but very little in here at an individual or small business level.
Support Australians through COVID-19
This area of the budget was for the most part a self promotion section, talking more about what has been done (the past) rather than what will be done (the future).
The main items of note here were those mentioned above, including LMITO and the extension of the full expensing and loss carry-back measures. Support packages for the tourism, aviation, creative and entertainment sectors were announced, but much of these are indirect, at a sector rather than a business level.
For a deeper dive into the budget, jump onto the government budget website here. For me, time for the pizza and beer I missed out on last night.