Federal Budget Summary 2022/2023
Treasurer Jim Chalmers handed down an updated 2022/23 Federal Budget, the first for the Albanese Labor Government. The Treasurer said “this is a responsible Budget that is right for the times and readies us for the future.”
Please note, until legislated these Federal Budget announcements are only proposed changes.
The Budget did not contain any major tax changes, however there are some areas highlighted below we feel are most valuable to you and should be brought to your attention below.
FBT – Electric cars
The Government announced that it will provide an exemption from FBT in relation to electric vehicles from 1 July 2022. This measure has been previously announced. Legislation has already been introduced to Parliament and is currently before the Senate and was scheduled for debate on Wednesday 26 October 2022.
The measure will exempt battery, hydrogen fuel cell and plug-in hybrid electric cars from fringe benefits tax and import tariffs that are below the luxury car tax threshold for fuel-efficient cars ($84,916). This only applies to cars first held and used from 1 July 2022, nothing prior. Employers will need to include exempt electric car fringe benefits in an employee’s reportable fringe benefits amount.
Depreciation of intangible depreciating assets
The Government announced that it will not proceed with the measure to allow taxpayers to self-assess the effective life of intangible depreciating assets, which was announced in the 2021/22 Budget. The Labor Government will instead “maintain the status quo” to ensure the effective lives of intangible assets continue to be set by the legislation.
Digital currency – Tax treatment
The Government provided clarity regarding tax treatment of digital currency. It announced that digital currencies (such as Bitcoin) will continue to be excluded from the Australian income tax treatment of foreign currency.
Please note: currencies issued by or under the authority of sovereign governments will continue to be taxed as foreign currency.
Downsizer superannuation contributions eligibility
It has been confirmed that the eligibility age to make downsizer contributions of up to $300,000 per person, will be reduced from 60 to 55 years of age. Legislation to give effect to this measure is currently before the Senate.
Supporting small business owners
The Small Business Debt Helpline and the NewAccess for Small Business Owners programs were introduced to support the financial and mental wellbeing of small business owners. The Government announced that an additional $15.1 million, over two calendar years, from 1 January 2023 will be provided to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program.
Off-market share buy-backs
The Government aims to improve the integrity of off-market share buy-backs undertaken by listed public companies by aligning their tax treatment with on-market share buy-backs.
Support for working parents
The Federal Government was excited to announce its improvements to the Paid Parental Leave Scheme. This announcement will see Australia's paid parental leave entitlement extended by six weeks to a total of 26 weeks (six months). The aim is to ease the cost of living for families and reduce barriers to greater workforce participation. The increase will be introduced in a staggered approach by increments of two weeks, starting from 1 July 2024 until it reaches the full 26 weeks, from July 2026.
Please contact our office on 08 8523 0999 or admin@milaneseco.com.au if you wish to discuss how these items directly impact your personal situation.
Sources:
NTAA 2022/23 October Federal Budget Summary
CPA Federal Budget October 2022-23: Summary of tax and superannuation measures