The Treasurer, the Honourable Dr Jim Chalmers MP, handed down the 2022-2023 October Budget at 7:30 pm (AEDT) on 25 October 2022.
The continuing impacts of the global economic environment led to a budget deficit of $36.9 billion or 1.5% of GDP. Regarding inflation, the Treasurer stated that inflation is expected to peak at 7.75 % later this year, before moderating over time, to 3.5% through 2023–24, and returning to the Reserve Bank’s target range in 2024–25. The unemployment rate is forecast to rise to 4.5% by the June quarter of 2024.
The Government announced a five point plan for cost of living relief which includes:
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Cheaper child care;
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Expanding Paid Parental Leave;
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Cheaper medicines;
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More affordable housing;
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Getting wages moving again.
From a tax perspective, for individuals, the Government has not announced any changes to the Stage 3 tax cuts which have been legislated to commence from 1 July 2024. As part of Stage 3, the 37% tax rate will be removed, and the 32.5% tax rate will be reduced to 30%. Individuals will be taxed at a marginal tax rate of 30% for income earned between $45,000 and $200,000. No substantial changes have been announced for individuals from a tax point of view.
There have been a few announcements in relation to changes impacting multinational businesses and significant global entities (those with global revenue in excess of $1 billion), but there is nothing substantial in the budget for small and medium sized businesses in Australia.
Our National Tax Committee have analysed the budget papers and prepared the following summary of the major Budget announcements.
A full report of the Budget will follow in due course.
Read our summary here.