2022 Budget Summary
The 2022 Budget, brought down in March – 6 weeks earlier than normal, is the last Budget before the the Federal Election in May.
Here’s a summary of some of the more important parts of last month’s announcement.
Compared to past years, this year’s Budget is a little bland however, it does include some ‘sweeteners’ to keep the electorate favourably disposed toward the incumbent Government, come election day. It goes without saying the measures announced in the Budget are not a fait accompli. In many cases, legislation will need to be passed, and that will not occur until after the election. And this also assumes that the current Government will be returned to form the 47th Australian Parliament.
On top of the cash payments to support pensioners, allowees, and eligible concession cardholders that have already been made, here are some of the key points that may be of interest.
Superannuation: Fifty per cent reduction of minimum pension payments extended to 1 July 2023
Taxation: $420 added to low and middle-income tax offset for 2021/22
Fuel Excise: Immediate 50 per cent reduction in excise until 28 September 2022
SUPERANNUATION
This year’s Budget was light on superannuation announcements. The only announcement of note is the extension of the temporary reduction in minimum income payments. The temporary 50% reduction in minimum pension payments that has been a feature of the superannuation landscape for the past few years has been extended to 30 June 2023. The discount applies to account-based pensions and market-linked income streams.
TAXATION
Introduced back on 1 July 2018, the low and middle-income tax offset is a temporary measure that provides a tax offset of between $255 and $1,080 for taxpayers with taxable income of up to $126,000.
The low and middle-income tax offset will finish on 30 June 2022 however the Budget allows for an increase of up to a further $420, making the total offset $1,500, for the 2021-22 financial year.
This will be available once taxpayers lodge their 2021-22 income tax returns.
The cost of COVID-19 tests will be tax-deductible to taxpayers where the tests are required to attend a place of employment. Where employers provide COVID-19 testing for their employees, the cost of the tests will be exempt from fringe benefits tax.
FUEL EXCISE
In recent months, Australians have experienced significant increases in the cost of fuel with prices exceeding $2 per litre being commonplace. The Government has responded by announcing a temporary reduction in the fuel excise rate. The rate will reduce from the current 44.2 cents per litre to 22.1 cents per litre. The reduction will apply from 30 March 2022 and will continue until 28 September 2022. Provided the full discount is passed on to motorists at the pump, this will reduce the cost of a 60-litre tank of fuel by just over $13.