2022 Federal Budget Summary: What's in it for you?

This blog summarises the initiative contained in the 2022 Federal Budget announced on 29 March 2022.Budget initiatives that might affect youExtended the home loan guarantee schemeThe First Home Loan Deposit Scheme (FHLDS) allows borrowers to borrow more than 80% of a property’s value whilst avoiding the cost of lenders mortgage insurance (LMI), because the government guarantees part of the loan. The government has announced it will increase the number of places from 20,000 to 50,000 per year. 10,000 of these places are reserved for regional home buyers and 5,000 for single parents.Cut the cost of petrol and diesel by 24 cents per litreEffective immediately, the fuel excise (which is currently 44.2 cents per litre) will be cut by half for 6 months i.e. until the end of September. As excise also attracts GST, the saving per litre will be a little over 24 cents. This is estimated to save drivers between $10 and $20 per tank.Excise is charged when fuel is deposited into petrol retailers’ tanks (at the service station). Therefore, this saving will not flow through to consumers until fuel stocks are replenished, which should occur over the next couple of weeks.A tax refund of up to $420 when you lodge your tax return after 1 July 2022If you earn less than $126,000, you would have been entitled to the Low and middle income tax offset (LMITO) since the 2018/19 financial year. The maximum tax offset used to be $1,080 if you earned $90,000. For this financial year ending 30 June 2022, the maximum LMITO will be increase by $420 to $1,500. If you earn close to $90,000, your tax return will be $420 more when you lodge your 2021/22 tax return.One-off payment to pensionersNext month, the government will make a one-off, tax-exempt payment of $250 to eligible pensioners, welfare recipients, veterans, and eligible concession card holders.Work-related RAT tests are tax-deductibleThe cost to purchase Rapid Antigen Tests for work-related purposes are tax-deductible (and exempt from Fridge Benefits Tax if provided by employers).Minimum super pension halved for another yearIf you are retired and have a super pension account, you must draw a minimum annual pension that is based on your age; e.g. if you are under 65 you must draw 4% of your balance at the beginning of the financial year. The government will halve this minimum amount for the last two financial years to help people preserve their super balance given recent share market volatility i.e. so they didn’t have to sell down investments. This initiative will extend for one further year (i.e. 2022/23).Small business tax instalments to be based on actual profitabilitySmall businesses must pay quarterly income tax instalments. The amount of the instalments is based on the business’ previous financial year. The government will change the system from the start of 2024 such that instalments are based on actual quarterly profit. This should help small business improve their cash flow management.Additional 20% tax deduction for small businessSmall business’ will be entitled to an additional 20% deduction for the cost of employees attending external training (provided by RegiMy new book is available for pre-order now: Pre-ordering the book will help me get it into bookstores. So please do me a favour - please consider pre-ordering now - links and pre-order bonus are available here: https://prosolution.com.au/book-preorder-bonus Do you have a question for the podcast? Email us at [email protected]. If you're interested in working with our team and me, discover how we can work together here: https://prosolution.com.au/family-office-servicesIf this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://prosolution.com.au/stay-connected IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.