Federal Budget 2023. The Good & Not So Good.

The Good News Low-income renters: The government has proposed a 15% increase in the maximum rate of the Commonwealth Rent Assistance (CRA) payment from 20 September, subject to parliamentary approval. This would mean recipients of the CRA, of which 1.1 million low-income Australians are eligible, will receive more financial support. Small businesses: Small business owners will benefit from a range of financial measures, including a temporary increase in the instant asset write-off threshold to $20,000 from 1 July for one year. This will allow small businesses with an annual turnover of less than $10m to deduct the entire cost of assets that cost less than $20,000, which are first used between 1 July 2023 and 30 June 2024. Small businesses can take advantage of this measure to buy multiple assets, as the $20,000 threshold applies to each asset. Small and medium-sized businesses will also be encouraged to buy energy-efficient fridges, electric cooling systems, batteries, and other assets that support electrification and more efficient energy use. Companies with a turnover of less than $50m will be able to deduct an additional 20% of the cost of depreciating assets that are eligible under the small business energy incentive measure. Small businesses will also receive energy bill relief as part of a scheme primarily directed at welfare recipients. Welfare recipients: Base rates of support payments including jobseeker, youth allowance, the partnered parenting payment, and Austudy will rise by $40 a fortnight from 20 September. The higher single jobseeker payment will be extended to those aged over 55 who have been on the payment for more than nine months. The government will also spend $3bn on direct bill relief to eligible households, including pensioners, seniors health card holders, and family tax benefit A and B recipients, to address rising household energy costs. Single parents will be able to claim the single parenting payment until their youngest child turns 14, up from eight, which will benefit approximately 57,000 families by providing an extra $176.90 a fortnight. Doctors, aged care workers, and people needing healthcare: The government will spend $3.5bn to triple the bulk-billing incentive that GPs receive. This means there will be more consultation types which doctors can choose to bulk bill. Eight new Medicare urgent care clinics will be established to open for longer hours with no out-of-pocket costs, bringing the total across Australia to 58. The government will also spend hundreds of millions to better coordinate healthcare, including on telehealth, the digitisation of records, and increasing Medicare rebates for consults longer than 60 minutes. Aged care workers will benefit from a 15% pay rise. Politicians: The government will increase its spending on politicians by $159m over the next four years, and approximately $40m annually going forward. Every parliamentarian will receive additional frontline electorate staff resources, as well as a boosted traveller expense allowance, which the government believes will help politicians be engaged and responsive to the increased needs of the community. Veterans: Services for veterans will be better funded, with $64.1m to tackle the backlog of claims for supports and increased demand for complex case management, rehabilitation, pharmacy, and health approvals. Another $2m will be spent over two years to continue the Department of Veterans Affairs' mental health literacy and suicide. The Not So Good Travellers: Starting 1 July 2024, those leaving Australia, whether for a holiday or to move permanently, will have to pay an additional $10 in passenger movement charges. This increase raises the charge from $60 to $70 per passenger. Smokers: The government aims to encourage smokers to quit by increasing tobacco excise by 5% a year for three years, starting from 1 September. These and other anti-smoking measures will raise tax revenue by $3.3bn. Middle-income renters: The new budget does not offer immediate relief for middle-income renters who are struggling to secure rental properties or facing rising rents. While the government has incentives to boost the supply of build-to-rent schemes, these schemes will not deliver new supply to the market for several years. Tax dodgers: The government has allocated almost $600m over four years to fund a crackdown on businesses that do not pay goods and service tax (GST). These compliance activities could potentially boost tax revenues by $10bn over the same period. Commuters: Despite an election pledge to prioritize a high-speed train along the east coast of Australia, starting with a Sydney to Newcastle section, the new budget does not contain any new funding for that rail track in the coming three financial years or for any significant commuter rail projects around Australia. Scammers: A national anti-scam center will be established from this coming financial year at a cost of $58m to respond to the spike in online scams and fraud. The center will share scam data across government and the private sector, and establish public-private sector fusion cells to target specific scam issues. Approximately $17m will be spent over four years to identify and take down phishing websites and investment scams.Scammers who send phoney text messages have also been put on notice, with $10m allocated for an SMS sender ID registry to stop criminals impersonating government and industry names. In conclusion, while there are good, and not so good outcomes in Australia's Federal Budget for 2022-23, it is clear that the government is taking measures to promote the greater good of the Australian people, particularly in terms of discouraging smoking and fraudulent activity. Nevertheless, some of us may experience difficulties due to increased charges and lack of immediate relief. If any of outcomes affect you and your family and you need a second opinion how you can benefit or overcome what is being planned, please reach out to ITP Queensland today. We’re always here to help and prepare you for greatness, no matter what the circumstances are.