Finance Federal Budget Federal budget 2022: Here’s what’s in it for you

Federal budget 2022: Here’s what’s in it for you

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Treasurer Josh Frydenberg has handed down a pre-election budget he says will deliver “temporary, targeted and responsible” relief to households and small businesses affected by the rising cost of living.

Here’s what’s in it for you.

For taxpayers

About 10 million Australians earning under $126,000 will receive hundreds of dollars’ worth of additional tax relief, due to an unexpected increase to the low-and-middle-income tax offset.

The offset, previously worth $1080, was speculated to be phased out, but the Morrison government has instead budgeted a one-off $420 increase.

  • Individuals already receiving the offset will now receive up to $1500 in tax relief, while couples will receive up to $3000
  • Taxpayers will receive the offset after they lodge their tax returns for the 2021-22 income year
  • The government will also slightly increase the Medicare levy threshold for individuals from $23,226 to $23,365, meaning more taxpayers on low incomes will be exempt from paying the tax
  • As expected, the government will halve the fuel excise for six months, saving motorists 22 cents per litre on petrol
  • Mr Frydenberg says the cut means a family with two cars who fill up once a week could save about $30 a week, or $700 in total over the next six months
  • The fuel excise cut will take effect from Wednesday, with flow through to the bowser expected over the next two weeks.

For income-support recipients

A $250 election sweetener will be handed out to those on income support payments to help with the rising cost of living.

  • The one-off payment will be handed out in April – one month before the election – to those on payments including JobSeeker, age and disability support pensions, parenting payment and allowance, youth allowance and those with a seniors health card
  • The payment is exempt from taxation and will not count as income support
  • Only one payment will be handed out per person, regardless of whether they receive more than one income support payment
  • The Treasurer says six million Australians are eligible to receive the payment.

For home buyers

The Morrison government announced its housing policy yesterday, so there were no major surprises here.

  • An additional 35,000 places have been added to the First Home Guarantee, where the government underwrites loans to first-home buyers so they can build a new home with a deposit as low as 5 per cent deposit
  • Another scheme, the Family Home Guarantee, will offer government loan guarantees to a further 5000 single parents so they can buy a home with as little as a 2 per cent deposit
  • The government is introducing a new Regional Home Guarantee, which will provide 10,000 guarantees to people who have not owned a home for five years to buy a new property outside a major city with as little as a 5 per cent deposit
  • All up, the scheme will support up to 50,000 prospective home buyers annually.

For trainees, apprentices and upskillers

Just under $1 billion will be spent over the next five years to boost Australia’s skills development pipeline.

  • Apprentices and trainees in yet-to-be-confirmed “priority industries” will be able to access $5000 in retention payments split into four instalments every six months for three years
  • Their employers will also receive new and generous wage subsidies
  • First- and second-year apprentices will have 10 per cent of their wages covered by federal taxpayers through to 2025-26, while third-year apprentices will receive a 5 per cent subsidy
  • Up to 5000 disadvantaged youth will be funded to take part in a new “ReBoot” program to develop their employability skills.

For parents

The government hopes sweeping changes to the paid parental leave scheme will make it easier for couples to choose how they balance work and child care.

  • Single parents will have access to an additional two weeks of leave, meaning they will now be able to take up to 20 weeks – the same amount as couples
  • The government is also rolling Dad and Partner Pay into Paid Parental Leave Pay to create one single scheme that gives the 180,000 new parents who access it each year increased flexibility to choose who accesses it
  • The changes mean fathers and partners can access the scheme at the same time as any employer-funded leave, in the same way mothers can
  • The income test will also be broadened to include an additional household income threshold of $350,000
  • Paid Parental Leave can be taken any time within two years after a child is born.

For business owners

In his speech, the Treasurer said the government would reward small businesses that invest in skills and new technology.

  • Small businesses with an annual turnover of less than $50 million will from Tuesday night be able to deduct 20 per cent of the cost of training their employees
  • Mr Frydenberg said this means for every $100 a small business spends on training their staff, they will get a $120 tax deduction
  • Similarly, small businesses will be able to deduct 20 per cent of the cost of purchasing equipment to digitalise their businesses, such as portable payment devices, cyber security systems or subscriptions to cloud-based services
  • An additional $53.9 million will be spent to continue COVID-19 business support payments and pandemic leave disaster payments
  • The government is cutting red tape for fuel and alcohol small businesses that earn less than $50 million by allowing them to lodge returns and pay excises on a quarterly rather than weekly basis. 

For patients

New listings of the Pharmaceutical Benefits Scheme (PBS) are set to lower the cost of some medicines, while the government has unveiled a women’s health package aimed at improving support for endometriosis, stillbirth and miscarriage.

  • All up, the government will spend $2.4 billion over five years adding new medicines to the PBS. It claims the cost of some medicines will be reduced by revenue from rebates negotiated as part of confidential purchase agreements
  • It has already listed the drug Trodelvy, which is used to treat a rare form of breast cancer, on the PBS, meaning patients will be able to save up to $80,000 per treatment
  • It will also list a new pelvic magnetic resonance imagining item on the Medicare Benefits Schedule. The device can be used to investigate infertility, including in relation to endometriosis
  • The PBS safety net thresholds will be reduced, meaning patients with a high demand for prescription medicines won’t have to get as many scripts
  • Women’s health will be bolstered by investments in endometriosis clinics, stillbirth autopsies and bereavement support, and breast and ovarian cancer programs
  • Mental health support organisation Lifeline will benefit from a $52.3 million funding boost over four years, as part of a $547 million mental health support package.