Yes, that’s right, our fourth Federal Budget in two years was handed down last night. Although it was a mini-budget designed to outline how the government intends to fund its election promises, it was seen as important in addressing relief against the increasing cost-of-living pressures. These pressures have stemmed from forces including slow wage growth, climbing interest rates and high inflation.
So, you didn’t even know there was another budget, let alone watch the televised budget coverage or read the budget commentary and analysis? Well, we did, and here’s a summary for you.
In this Budget the Treasurer has sought to exercise fiscal restraint so as not to put more pressure on prices. Rather, the Budget sets out a 5-point plan for cost-of-living relief in the areas of:
- Child Care
- Paid Parental Leave
Tax Related Measures
The Budget does not contain major tax changes but it does aim to begin some Budget repair work via tax integrity measures.
- COVID grants treated as non-assessable non-exempt (NANE) income – the Budget listed further State and Territory COVID-19 grant programs eligible for non-assessable, non-exempt treatment.
- Digital currencies – the Budget confirms that the Government will introduce legislation to clarify that digital currencies will continue to be excluded from the Australian income tax treatment of foreign currency.
- Intangible asset depreciation – reversal of previously announced option to self-assess effective life for certain intangible assets including in-house software and intellectual property. The effective lives of these assets will continue to be set by legislation.
- Previous Government initiatives – eight measures announced by the prior Government will be abandoned and a further three will be deferred. These include measures related to “Business Taxation”, superannuation and personal tax.
- Tax Practitioners Board (TPB) funding – the TPB will get increased funding to investigate high-risk areas.
- Paid Parental Leave (PPL) scheme – to be expanded from 1 July 2023 so that either parent can claim the payment. From 1 July 2024, the scheme will be expanded by two additional weeks a year until it reaches a full 26 weeks from 1 July 2026.
- Childcare subsidy (CCS) – maximum CCS rate to be increased from 85% to 90% for families for the first child in care and increase the CCS rate for all families earning less than $530,000 in household income.
- Affordable housing – the Government will establish a Regional First Home Buyers Guarantee Scheme and a Housing Australia Future Fund.
- Housing Accord – struck between State and Territory governments and investors, including super funds, targeting 1 million new homes over 5 years from 2024. The Government will commit $350 million over 5 years to deliver 10,000 affordable dwellings.