The 2022-23 Federal Budget was presented to parliament last month. So, what's in the budget and is it good news for your bottom line? Here’s a reminder of the key highlights.

So, what are the Coalition promising? Here’re the outtakes that may affect your bottom-line.

 

Cost of living quick fixes

 

Consumers are facing increasing pressures from rising costs of living, against a backdrop of COVID disruptions, the war in Ukraine and natural catastrophes such as the floods and bushfires, rising inflation, and interest rate rises are anticipated as early as June too. 

The Coalition’s $8.6bn cost of living package includes a number of one-off payments, which have been criticised by some as short-term fixes rather than long-term solutions, including: 

 

A boost to the ‘Lamington’ tax offset 

 

  • One-off $420 cost of living tax offset for Low and Middle Income Earners
  • $250 cost of living payment for welfare recipients
  • Fuel excise to be halved for six months

The Low and Middle Income Earner Tax Offset (LMIETO), sometimes referred to as the ‘lamington’ tax offset, will be extended. From 1 July over 10 million eligible low- and middle-income individuals will also receive a one-off $420 cost of living tax deduction when they complete their 2021-22 taxes. 

Combined with the LMIETO, those eligible will receive up to $1,500 for a single income household or up to $3,000 for a dual income household.

 

$250 one-off payment for welfare recipients

 

Some six million welfare recipients will also receive a one off, income tax-exempt payment of $250. It will be paid automatically to all eligible pensioners, welfare recipients, veterans and eligible concession card holders in April 2022.

 

Relief at the bowser

 

The sugar hits of the budget continue with a halving of the fuel excise for six months, in an effort to reduce the pain felt at the petrol pump as the Russian invasion of Ukraine has seen fuel prices soar. The 44.2 cents per litre fuel excise will drop to 22.1 cents, with the savings expected to flow to bowsers in the next fortnight, right in time for the election. 

While the government estimates this will save the average household with one car $300 over six months, given the current volatility in the sector, this may or may not translate to significantly reduced petrol prices. 

 

Help for first home buyers

 

Schemes that help first-home buyers struggling to save a deposit to be expanded. 

The government says it wants to help more Australians get into the housing market as property prices continue to surge. The Budget includes an expansion of the Home Guarantee Scheme to make available up to 50,000 places per year, more than double the current number of places available. 

The First Home Super Saver Scheme (FHSSS) helps Australians boost their savings for a first home by allowing them to build a deposit inside superannuation - effectively giving them a tax cut. For most people, the FHSSS can boost the savings they can put towards a deposit by at least 30 per cent compared with saving through a standard deposit account. 
From 1 July 2022, the maximum amount of voluntary contributions that can be released under the FHSSS will be increased from $30,000 to $50,000 enabling first home owners to achieve their dreams of home ownership sooner.

 

Superannuation to stay the same

 

There were no changes to when you can access your super or how much you can contribute. However, previously announced changes to super will come into effect from 1 July this year.

 

Quick snapshot of the latest RBA announcement (April 2022):

 

At its board meeting on the 5th of April, the RBA has now confirmed that the official cash rate will remain at 0.10%. The Board wants to see actual evidence that inflation is sustainably within the 2 to 3 per cent target range before it increases interest rates.

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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.