At a glance: Federal Budget Summary October 2022
This short summary focusses on specific taxation, superannuation and social security measures.
At a high level, this budget contained a range of very specific measures targeting taxation, superannuation, housing and social security but no wholesale tweaking or reforms that really enter conversations on wealth creation and retirement funding strategies. The following summary is not complete and focusses only on the specific taxation, superannuation and social security measures. Some of the following announcements are described in more detail further on in this report.
A high level overview of the Federal Budget October 2022
At a high level, this budget contained a range of very specific measures targeting taxation, superannuation, housing and social security but no wholesale tweaking or reforms that really enter conversations on wealth creation and retirement funding strategies. The following summary is not complete and focusses only on the specific taxation, superannuation and social security measures. Some of the following announcements are described in more detail further on in this report.
Taxation
Personal tax rates remain unchanged for 2022-23 and the already legislated Stage 3 tax cuts starting from 2024-25 unchanged.
Cryptocurrency is not a foreign currency – as governments around the world tackle with how to assess gains and losses on crypto, the Government will introduce legislation to clarify that digital currencies (such as Bitcoin) continue to be excluded from the Australian income tax treatment of foreign currency.
Superannuation
Super downsizer contributions – the government confirmed that it will reduce the eligibility age to 55 (60 currently).
SMSF residency changes - the proposal to extend the central management and control (CM&C) test safe harbour from 2 to 5 years, and remove the active member test, will now start from the income year commencing on or after assent to the enabling legislation (previously 1 July 2022).
SMSF audits every 3 years - the Government will not proceed with the former government's proposal to allow a 3-yearly audit cycle for SMSFs with a good compliance history.
Retirement income products - the Government will not proceed with the proposal to report standardised metrics in product disclosure statements (PDSs).
Social Security and housing
Affordable housing measures – the Government will establish a Regional First Home Buyers Guarantee Scheme and a Housing Australia Future Fund.
Housing Accord - targeting 1 million new homes over 5 years from 2024. The Government will commit $350m over 5 years to deliver 10,000 affordable dwellings. The Accord has been struck between State and Territory governments and investors and will include super funds.
Paid Parental Leave (PPL) scheme - to be expanded from 1 July 2023 so that either parent can claim the payment. From 1 July 2024, the scheme will be expanded by 2 additional weeks a year until it reaches a full 26 weeks from 1 July 2026.
Child care subsidy - maximum CCS rate to be increased from 85% to 90% for families for the first child in care and increase the CCS rate for all families earning less than $350,000 in household income.
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