Federal Budget 2022
Photo from Unsplash
On Tuesday 29th March, the 2022 Australian federal budget was announced by Josh Frydenberg (Treasurer).
It is known that last year was challenging for Australian businesses, with some businesses still dealing with the economic impact of Covid-19, including staff shortages. The purpose of the 2022 budget is to help Australians navigate the rising cost of living and provide incentives to small businesses.
Here are the main insights:
Fuel: To assist with the rising cost of living, from March 30, 2022, the fuel excise on petrol and diesel will be cut in half for 6 months (decrease from 44.2 cents per litre to 22.1 cents per litre). To ensure these savings are passed onto individuals, the Australian Consumer and Competition Commission will be closely monitoring leading retailers.
Apprenticeships: The government is allocating $2.8 billion in funding to increase the uptake in apprenticeships. This step aims to upskill individuals, whilst offering a reward for employers for providing individuals with an opportunity (up to $15,000 in wages subsidies). The funding will also address the skills shortage and increase employee retention in high-demand industries.
PAYG tax: Effective next financial year, the calculation used to set how much tax a business is required to pay each quarter will change. This change is being implemented to cut the red tape for Australian businesses, providing them greater cash flow and reducing the time spent on administration. Decreasing the GDP ‘uplift’ rate from 10% to 2% for 2022‑23, it is expected that $1.85 billion will be delivered in cash flow support for 2.3 million taxpayers, including small businesses.
Patent box scheme: Introduced in 2021, the patent box scheme was designed to encourage Australian businesses to keep their research and development (R&D) local and patents registered in Australia. Originally, the scheme covered areas of medical and biotech innovation. Now, it has been expanded to include agricultural and low-emission technology. Businesses in these industries that keep their operations, R&D and patents local will now be taxed at a concessional rate (17%).
Low- and middle-income earners: In 2021-22 financial year, the low- and middle-income tax offset will be expanded, with a one-off $420 boost to help with the rising cost of living. This means that workers will be able to claim up to $1500 during tax time (from 1 July, 2022), when combined with the $1080 boost announced in previous years.
Paid parental leave: The federal government has also announced changes to paid parental leave. Both parents will be able to access 20 weeks of paid parental leave which can be shared between either eligible parent. So, parents with new children will have flexibility to manage both work and care. Single parents will also be able to access the full 20 weeks of paid parental leave.
Women in business: The government will be dedicating $56.2 million in funding to support women in business, helping them improve their entrepreneurial skills and transition into industries such as tech and manufacturing.
Additionally, the government will provide $40.4 million to support more women into senior and leadership roles.
For a full overview of the 2022/23 Australian budget, Click here.