Shuffling the Deck — 2022-23 Budget 2.0
There is nothing in the 2022-23 Federal Budget 2.0 that will create a UK-style crisis:
the stage 3 tax cuts legislated to commence on 1 July 2024 are not mentioned, and
most funding initiatives appear to be a reallocation of previous Government initiatives.
With seven months before the 2023-24 Budget released in May 2023, this Budget is a shuffling of the deck, not a new set of cards.
Key measures include:
Childcare subsidy increase
Added flexibility and an expansion of Paid Parental Leave
Aged care reforms
Change to the taxation of off-market share buy-back by listed companies
The scrapping of the initiative to self-assess the effective life of intangible assets
Scrapping of the announced but not legislated 3-year audit cycle for SMSFs
Energy grants for SMEs (but no detail yet)
Read our full summary:
Cost of living pressures will continue. While some initiatives such as the increase to childcare subsidies will help, the Budget flags some fairly bracing economic expectations.
Tight labour market conditions are expected to see annual wage growth pick up to 3.75% by June 2023. Even so, high inflation is expected to see real wages fall over 2022-23 before rising slightly over 2023-24. That is, your wages might increase but the gains will be eaten away by the increasing cost of living.
The ATO gets an extra $80m to extend its personal income tax compliance program, with $674m anticipated in increased receipts and over $80m in increased payments as a result. Tax deductions will be looked at closely.
As expected, multinationals are a target. New measures will limit opportunities to shift taxable profits offshore. And, the ATO’s Tax Avoidance Taskforce is expected to deliver a whopping $2.8bn in additional tax receipts and $1.1bn in payments over the 4 year period.
How to contact us
If we can assist you to take advantage of any of the Budget measures, or to risk protect your position, please let us know. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.