2022-23 Federal Budget Highlights

The Federal Government has delivered a big-spending 2022 budget, taking immediate steps to reduce cost of living pressures for working Australians while implementing a range of massive infrastructure and defence spending measures.

The Government will slash the fuel excise by half, effective immediately, as well as provide a one-off cash hand out of $250 to a range of social security recipients, and a $450 additional tax offset for low- and middle-income earners, in what is clearly a ballot-box friendly budget.

Productivity will be boosted across the nation by enhanced training incentives, dramatic tax measures to drive greater digital adoption and improve computer-based efficiencies as well as steps to boost the nation’s overall level of self-sufficiency. 

Concerns about the growing budget deficit, which has now reached $78 billion, have been largely put on the back burner with confidence placed in the fact that as the economy grows, this will naturally reduce.

A bounding economy

And the Australian economy and the Australian ASX has posted astonishing growth. It has come roaring out of two years of pandemic induced lockdowns, to post strong growth across the nation, spurred on by higher prices for coal, iron ore and wheat.

Gross domestic product is expected to expand by a massive 4.2% this year while wages are expected to grow by 2.75% and surge by 3.25 % in the following year.  Unemployment is currently 4%, but this is expected to drop to 3.75 % over the next six months - its lowest level since 1974.

An extra 100,000 Australians have found work compared to employment numbers recorded when the pandemic first hit in March 2020. This in turn is expected to help slash welfare payments by $11 billion across the next four years.

Australian shares on the ASX continue to grow, and investors will see profit in the coming times.

A focus on increased productivity

Training and improved productivity remains a key focus with the Government implementing a $365 million extension to the existing apprentice wage subsidy scheme in an attempt to further boost apprenticeship training.

The Federal Government is continuing its focus on boosting business productivity allowing a $120 tax deduction for every $100 spent on digital adoption technology, such as portable payment systems, cyber security measures and subscriptions to cloud based services.

A similar tax measure will be introduced for businesses providing external training courses to staff whether online or in-person, to increase productivity throughout the economy.

This will be supported by a raft of Government driven efficiencies such as digitalising trust income reporting, improved PAYG systems and the automatic reporting of taxable payments.

And a more efficient economy

The 2022-23 budget also includes a raft of infrastructure projects that will drive greater efficiencies and economic growth across Australia in the decade ahead. These projects include:

• • $18 billion in priority road and rail infrastructure
  • $7.1 billion to develop regional economies
  • $6.9 billion in significant new water infrastructure
  • $10 billion on the new East Coast submarine base
  • $4.3 billion upgrade to the Henderson naval shipyard
  • $2 billion for a Moderna mRNA vaccine plant in Victoria

In addition, the Government has announced steps to develop a circular waste economy, support low emission technologies including hydrogen, extended gas pipeline infrastructure and more efficient environment approval strategies.

The Share Market In Australia Today

The share market in Australia today is expected to experience an increase in price, and therefore growth.

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purposes only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceedings. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.
ASR has no position in any of the stocks mentioned.