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.
With seven months before the 2023-24 Budget 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.
Of particular note:
- 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.
We’ll keep you up to date on the latest changes via our emails and social media pages.
Grab a cuppa, settle in and download the budget below.