The 2022-23 Federal Budget is titled: 'Australia's Plan for a Stronger Future',
and builds on the previous budget in terms of Australia's recovery from the COVID-19 pandemic
as well as addressing global issues such as the war in Ukraine.
For Australian corporates, there are a number of measures in the Budget that will be relevant to them. The first is,
the temporary reduction in Fuel Excise which will benefit many Australian businesses,
the second is the extension of the Patent Box Regime which was announced in the previous
year's Budget. Broadly, this measure provides a 17% reduced Corporate Tax Rate to eligible
innovative activities, so that is on Australian agricultural innovations, secondly to low-cost
emissions technologies and finally to Australian biotechnology and medical innovations.
The Federal Budget contains tax integrity measures providing the ATO with additional funding of approximately
$650 million over the next 2 years, to fund an ATO taskforce into tax avoidance by multi-nationals as
well as high net worth individuals; which is expected to raise approximately $2.1 billion
in additional revenue for the Government, it's certainly a measure to be watched.
The Government has also announced measures applicable from 1 April 2022 allowing a streamlining of Australia's
foreign investment review framework, broadly, this will allow some investors to invest without
notifying the foreign investment review board but it is still subject to National Security Clearance
by the Government, in certain cases.
There is a new Apprenticeships Incentives Scheme,
offering employers a wage subsidy of up to 10% for first and second-year apprentices,
and then reducing to 5% for third-year apprentices. It is limited to priority occupations.
The Federal Government referred to the UK/Australian Free Trade Agreement which was signed on the 17th December 2021,
this will broadly reduce tariffs on over 99% of goods exported to the UK.
The Federal Budget contains some important tax compliance measures for corporates,
the first is the modernisation of the PAYG instalment system to allow businesses to pay PAYG based
on their most recent financial performance which will allow businesses to have better cash flow.
The Government will also digitalise Trust and Beneficiary reporting with electronic lodgement of tax returns.
The Federal Government has also announced a smarter reporting of taxable payments and reports,
with the lodgement of these reports to be aligned with the business activity reporting cycle,
this should reduce red tape for business.
The Federal Budget contains a number of measures applicable specifically to small business,
that is aggregated turnover of below $50 million;
the first is a skills and training boost measure, allowing employers to have an additional 20%
uplift on any expenditure on training courses offered to employees by external providers,
where those courses are in Australia.
There's an additional technology investment boost allowing small businesses an additional 20% uplift
on deductions relating to digitalisation or updating their technology in their businesses, up to $100,000 cap per annum.
The Government's announced a 2% GDP uplift factor on PAYG instalments, which is a reduction from the 10%
under the statutory formula method, however, for the last 2 years it has been reduced to nil,
so it's an increase on the last 2 years; that is only applicable to small and medium businesses.