TAKEAWAYS FROM WESTPAC’S BUDGET WRAP

For those that have recently been living under a rock, last Tuesday Night was budget night.

Between the rising cost of living, record government debt on the back of COVID-19, natural disasters, international conflicts, worries of rising inflation coupled with a federal election expected within weeks, this was certainly no ordinary budget.

The 2022 budget for the most part focuses on five main themes, including Temporary relief on the back of skyrocketing cost of living, job creation & education, defence & national security on the back of international conflicts & infrastructure and housing.

Westpac’s budget summary provided key insights into the facts, figures & announcements by
the federal government & we’ve compiled the key takeaways from Westpac’s budget wrap.

TEMPORARY COST OF LIVING RELIEF

The rise in fuel prices on the back of the Ukrainian-Russian conflict is increasing logistics, transport & manufacturing costs, coupled with the damage to key infrastructure & supply chains on the back of the recent & devastating flooding in Northern NSW & South East Queensland is leading to large rises in the pricing of goods & services across the board.

As a result, the government has made it a key priority in the budget to provide relief within the budget. The key measure in this has been halving excises (tax) on fuel by 22c a litre for 6 months, expecting to save around $10 on a 40-litre tank.

When tax times come around, low and middle-income earners lodging their tax will receive a one-off tax offset of around $420, this will come into place from the 1st of July 2022.

Pensioners, carers, veterans and those on other social assistance recipients will receive a one-off $250 check next month.

 

MORE JOBS

Another key focus for the government in this budget will be providing economic grants & resources to help create more jobs.

A $5000 wage subsidy will be made available to employers wishing to hire apprentices as well as an additional $3.7 billion dedicated to the National Skills Agreement (NSA) with the states and territories, helping create & support over 800,000 training places in vocational education and training.

As an additional incentive for employers to train employees, employers will be eligible to receive a $120 tax deduction for every $100 small business spend on training, up to $100,000 a year.

DEFENCE AND NATIONAL SECURITY

On the back of international security uncertainty on the back of the Ukrainian-Russian conflict, the government has increased defence spending to $570 billion over the decade to 2030, as well as a 10-year capability plan worth $270bn, creating 100,000 jobs in the process.

 

 

INFRASTRUCTURE & HOUSING

With rising housing prices over the last few years, coupled with the rise in the cost of living making homeownership more out of reach for people, the government has moved to bring in incentives & and increase housing to make housing affordability more achievable.

The government has committed an additional $17.9bn into infrastructure spending (with most projects TBA), increasing the 10-year pipeline to above $120 Billion.

More directly affecting potential homebuyers, the First Home Super Saver scheme maximum has been increased to $50,000 from $30,000 & the Home guarantee scheme has been increased to $50,000.

On top of this, the government has committed $2,000,000 in NHFIC support to help construct more affordable housing in Australia.