Winners and losers of the 2022 budget

With cost of living pressures worrying many households and a federal election looming on the horizon, the release of the 2022-23 federal budget comes at a pivotal time for Australians and the federal government.

Now that Treasurer Josh Frydenberg has presented this year’s budget, what can Australians expect in terms of spending?

Here’s a quick breakdown of which areas and groups will benefit from this year’s budget and which will not.

Winners

Low and middle income earners

Low- and middle-income earners are at the heart of the government’s cost-of-living budget initiatives, with cohort members eligible for the one-time “cost-of-living tax offset” of $420 and any gasoline price relief that results from a fuel excise cut.

The government has, however, been keen to stress the temporary nature of these measures, so the benefits are also likely to be short-lived.

For example, while the new tax offset of $420 for the cost of living combined with the existing tax offset for low and middle incomes (LMITO) could allow certain taxpayers to benefit from a reduction of up to $1,500 this year, it looks like the LMITO won’t. be extended, meaning many wage earners could end up paying more tax next year.

Around six million Australians on income support, including pensioners, veterans and concession card holders, will also receive a one-time payment of $250 to help them cope with the cost pressures of the life.

Payment is expected to be released automatically in April.

Regional buyers

While soaring house prices have made it harder for many potential homeowners to enter the market, this year’s budget has provided some support for potential buyers with low deposits – especially those looking to buy in regional areas.

Under the proposed new Regional Housing Guarantee, 10,000 spaces will be allocated to eligible buyers looking to buy a newly built home or build their own home in the regions with a security deposit as low as 5%.

The government will step in and guarantee the loan, meaning buyers won’t have to pay lenders’ mortgage insurance.

“The introduction of the Garantie Habitation Régionale has the potential to help homebuyers, but also to stimulate the construction of homes in the regions,” said HIA chief executive Graham Wolfe.

“Many people have chosen to move to regional areas over the past two years to build a new life, which puts pressure on housing affordability in these areas.”

Additionally, an additional 35,000 spaces will also be made available to first-time home buyers under the First Home Guarantee scheme, while an additional 5,000 spaces will be available to single parents under the Family Home Guarantee scheme.

People with endometriosis

A $58 million package has also been put in place to improve research and funding for endometriosis – a condition which Endometriosis Australia says affects more than 830,000 women across the country.

Under this program, the government will fund the construction of specialized treatment centers in each state and territory, and it will make access to MRIs available through Medicare.

Along with the emotional and physical impacts of the disease, endometriosis can also have huge financial costs, as writer and endometriosis sufferer Kylie Maslen explained to Money in 2021.

“While the physical symptoms of endometriosis are becoming better known – and thankfully beginning to be diagnosed earlier – what is less often discussed is the economic impact of the disease.”

Motorists

One of the biggest questions to come in this year’s budget was whether the government would choose to address the sharp rise in petrol prices via a temporary fuel excise cut.

Well they just did, announcing a 50% reduction in excise duty on fuel for six months, although the ripple effect on prices at gas stations may take a few weeks to kick in. feel.

Billions of dollars in new funding have also been allocated to a range of road projects, including $2.26 billion for the North-South Corridor in Adelaide, $678 million to seal off parts of the Outback Way and $352 million dollars for the Milton Ulludulla bypass on the south coast of New South Wales.

And despite the headaches caused by the controversial commuter car park fund, the government has also earmarked an additional $47.5 million in this year’s budget for five commuter car park projects in New South Wales and Victoria. .

Small enterprises

Australian small businesses are also likely to benefit from a number of measures outlined in this year’s budget, particularly those looking to invest in their people and technology.

Starting tonight, small businesses will get a $120 tax deduction for every $100 spent on employee training or digital technologies like cybersecurity and cloud computing.

And for the 2022-23 fiscal year, around 2.3 million small and medium-sized businesses will be able to make PAYG and GST remittances at a reduced GDP growth rate of 2%, which the government says will help boost businesses. cash flow.

losers

Homeless Australians

There was no funding in the budget for a national plan to end homelessness

“Plans to help first-time homeowners will unfortunately not help most of the 275,000 people who are homeless each year,” said Sharon Callister, CEO of Mission Australia.

“The budget also ignored the needs of seniors who are among the fastest growing groups of homeless people.”

women and super

With this budget, the government has missed an opportunity to improve the financial security of Australian women.

“Our super system has a persistent gender blind spot that sees women retiring with almost a third less super than their male counterparts,” said Debby Blakey, CEO of HESTA.

She called on the next government to introduce a superannuation credit for new parents on unpaid parental leave and to pay a premium on Commonwealth paid parental leave.

Electric vehicles

Motorists won an early victory in a 50% fuel excise cut, saving drivers about $10 per tank for regular cars or nearly $20 for more thirsty models. But the lack of incentives or investment in electric vehicles and charging infrastructure has been noted by many observers.

EV Council chief executive Behyad Jafari said that instead of cutting fossil fuel costs, “we could spend that money on solving the problem for good.”

“Anyone who says we can’t afford – or it’s not good value for money – to subsidize electric vehicles, which would end our dependence on imported oil, must shut up,” he says. .

Renewable energy researcher Scott Hamilton tweeted that the $2 billion spent on reducing consumer fuel costs could have been spent on reducing the nation’s dependence on gasoline.

“Imagine how many electric vehicles and green H₂ [hydrogen] cars and trucks we could have put on the road and how many zero-emission refueling stations – with that kind of money every year for the past nine years.”

James Voortman, chief executive of the Australian Automotive Dealer Association, welcomed the fuel tax cut but said the government needed to look further and address structural problems with the auto industry.

Mr Voortman said ‘what we desperately need is a complete overhaul of Australia’s car taxation system’.

“This budget shows that motorists will pay billions in taxes, such as import duties, luxury car tax, employee benefits tax, GST and excise,” he said. .

“With Australia no longer manufacturing passenger vehicles and with the emergence of low-emission vehicles (LEVs), it is debatable whether our current car taxation regime is fit for purpose.”

The Australian Automobile Association, the peak body for motoring clubs such as the NRMA and RACV, said the change in fuel prices “could potentially offer short-term relief to motorists in a volatile global fuel market, but believes that it generates more medium-term challenges than it solves”.

The RACQ acknowledged the temporary fuel tax cut and welcomed an additional $1 billion in road and rail transport spending for Queensland.

Draft beer retailers

There were high hopes the budget would come with tax relief for small brewers and distillers after beer sales plummeted over the past two years due to COVID-19, but a pint of beer today today will not be cheaper.

Missing from this year’s announcement was the proposal to halve the cost of a keg of beer through tax cuts.

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