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October 2022 / 2023 Federal Budget

The Treasurer, Dr Jim Chalmers, delivered his first budget last night which was aimed at strengthening the economy in uncertain times.

There was little to interest clients and friends of NCS Group, however in listening to various media appearances today (26th October, 2022), it is apparent that cost pressures on energy, fuel and food will further increase inflation – as evidenced with the September quarter CPI announcement 26th October, 2022. This will further pressure Government revenues which will require future “hard decisions”. This (in the writer’s view) is code for income tax reform – increases!

Budget Key Points:

For Business Owners:

  • Additional 20% deduction for eligible external training courses for upskilling employees (announced by the former Government last March);
  • Additional 20% deduction for expenditure on digital technology (announced by the former Government last March);
  • Changes to calculations in PAYG Income Tax Instalments;
  • $2.8 billion in funding to subsidise the wages of select apprentices and trainees - $5,000 payments to new apprentices (in priority sectors) and up to $15,000 in wage subsidies for employers of apprentices;
  • $146.5m to support the recovery of the Australian tourism sector;
  • $80.m over 4 years to support SME’s in overseas markets via Export Development Grants

For Individuals:

  • Low and middle income tax offset $1,500 now gone as planned;
  • Concessional tax treatment on electric vehicles from 1st July, 2022;
  • Paid Parental Leave Scheme to be more flexible (either parent to claim payment) from 1st July, 2023. From 1st July, 2024, scheme will start expanding by additional 2 additional weeks a year until it reaches 26 weeks from 1st July, 2026.
  • Downsizer contributions to superannuation (up to $300,000 per person of proceeds of selling their home) – minimum eligibility age to reduce from 60 to 55 years of age
  • Those receiving Aged Pension or DVA Pension can earn additional $4,000 (to $11,800) in 2022-23 year before their pension is reduced.

Action Points for Business Owners:

As noted above – not a lot here for our clients. Given estimates of inflationary growth, and pressures on workforce availability, we highly recommend all clients keep a concerned eye on their budgets for the next few years and review / amend these regularly as circumstance change.

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