While the Federal Budget For 2022-2023 did not provide a buffet of announcements, there were some key measures announced of interest to businesses and individuals.
Paid Parental Leave
By 2026, expanded paid parental leave will offer 26 weeks of leave, up from 20 weeks. The extension of parental leave will apply in increments of two weeks, starting from 1 July 2024 until it reaches the full 26 weeks, from July 2026.
An increase in childcare subsidy for families earning below $530,000 per annum has been confirmed, with the increase to commence in July 2023.
Stage 3 Tax Cuts
Nothing was confirmed regarding stage 3 tax cuts in the October Budget. This leaves it open to being addressed in the May 2022-23 Budget.
The Budget addressed the eligibility of downsizer contributions to superannuation becoming available for those aged 55 years and above. This was previously only available to 60 years and older.
A downsizer contribution is a one-off post-tax contribution to superannuation up to $300,000 per person from the sale of their home. In the case of couples, both can contribute, and downsizer contributions do not count towards non- concessional caps. Likely, this will not be in effect until the next quarter after Royal Assent is obtained.
Off-market Share Buy-Backs Tax Treatment
The tax treatment of off-market share buy-backs undertaken by listed public companies will be aligned with the treatment of on-market share buy-backs. Current rules around share buy-backs by companies off-market mean that a proportion of the consideration for off-market purchases is treated as a dividend.
However, the change will make that entire consideration for off-market buy-backs to be treated as capital proceeds, with no associated franking credits.
Additional Funding To The Tax Avoidance Taskforce
The Taskforce will continue to be focused on compliance activities that target multinationals, large public and private groups, trusts and high- wealth individuals.
The government has announced a further $200 million in funding per year for the next three years to extend the Taskforce and, in 2025-26, there is to be a significant increase of $534.5 million for that year.