Labor Government 2022/2023 Full Detailed Federal Budget Report
The Federal Treasurer, Dr Jim Chalmers, handed down the Labor government’s first Federal Budget at 7:30 pm (AEDT) on 25 October 2022.
Despite an uncertain global economic environment, the Treasurer has lauded Australia’s low unemployment and strong export prices as reason for a 3.5% growth in the current financial year, slowing to 1.5% in 2023–24. The Budget projects a deficit of $36.9 billion, lower than the forecast earlier this year of $78 billion.
Described as a sensible Budget for the current conditions, it contains various cost of living relief measures including cheaper childcare, expanding paid parental leave and encouraging downsizing to free up housing stock. Key tax measures are targeted at multinationals, particularly changes to the thin capitalisation rules, and changes to deduction rules for intangibles.
There were very few positives in the budget for small business and no substantial income tax changes. Importantly, there are no proposed changes to capital gains tax discount rates, refund of franking credits or limits on deductions for negative gearing which have all been touted as potential changes in previous Labor policy announcements. It would seem that the Labor Government is waiting until the May 2023 Budget to announce any major fiscal changes.
Importantly, no amendments have been proposed to the already legislated Stage-3 individual tax rate cuts.
Additional funding for a range of tax administration and compliance programs has also been announced. There has been an increase of $240 million funding for the ATO’s crackdown on the shadow economy and compliance, as well as $1.1 billion of additional funding for the Tax Avoidance Taskforce which is expected to generate over $5.5 billion in revenue over the next 4 years. This includes around $2.8 billion over 4 years through high net wealth individuals and private groups.
Finally, the fate of a suite of announced but unenacted tax measures, including a few that have been around for at least 10 years, has been confirmed.
Please click on the link at the top of page for Blaze Acumen’s full detailed report.