There is nothing in this Budget that would create a UK-style crisis. The stage 3 tax cuts legislated to commence on 1 July 2024 are not mentioned, and most funding initiatives appear to be a reallocation of previous Government initiatives. And, the commodity-driven $54.4 billion improvement in tax receipts has largely been banked, not spent.
While the 2023-24 Budget will be released in May 2023, this Budget is a shuffling of the deck not a new set of cards. And to continue the pun, we need to play the hand we have been dealt, buffeted by externalities – war, floods, and global uncertainty.
Key measures include:
Child care subsidy increases: while we can’t specifically advise on this, it is welcome relief for families with young children!
Downsizer eligibility contribution age decreased from 60 to 55
Crypto currency clarified as being a capital asset and subject to capital gains and losses rules
Energy efficiency grants for SMEs: no details available yet, however, we will keep you updated as new information comes to hand
Global economy: warning that there is a highly uncertain global economic outlook due to potential recessions in advanced economies
Cost-of-living pressures will continue. While some initiatives such as the increase to child care subsidies will help, the Budget flags some fairly bracing economic expectations:
Inflation expected to peak at 7.75% in the December quarter and will persist at higher rates for longer than expected before easing to 3.5% by June 2024.
Real GDP is forecast to grow to 3.25% in 2022-23 then retract to 1.5% in 2023-24.
Electricity prices are expected to increase nationally by an average of 20% in late 2022, with retail electricity prices expected to rise by a further 30% in 2023-24.
The deficit sits at $36.9bn, while this is better than originally estimated, the deficit expands to $49.5bn by 2025-26.
Stay tuned for our key takeaways for business owners as we help you plan ahead for policies likely to impact your business.
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Source: Knowledge Shop Pty