The 2022 budget for the 2022—23 financial year will be unveiled on Tuesday night and everyone is waiting to find out if the Federal Government will, as we expect and hope, do literally anything to help lower the high cost of living right now.
This will be Treasurer Josh Frydenberg’s most important budget yet, as it’s the government’s moment to show off before the election — which is set to be called in the coming days.
This is the government’s last and best chance to win back voters after an abysmal couple of months in the polls. It’s safe to predict they’ll cast their nets wide and appeal to the hip-pocket nerves of so-called everyday Australians. But in the grand scheme of things those struggling the most to fill up their cars and put food on the table at the moment will likely not get much help.
What can we expect from the 2022 budget?
Petrol prices will hopefully come down
Fuel prices passed well over $2 per litre across most of the country this month and I dunno about you but I can no longer afford to drive anywhere.
The government has faced pressure from the opposition and state governments to help reduce the price for Aussies and it seems it’s finally, hopefully, going to do something.
The government plans to temporarily cut the tax on fuel that petrol stations pay.
Out of the $2/L motorists pay for fuel, 44.2 cents goes to government taxes. But that is set to be halved for six months with the hope (no guarantees ‘cos it’s a free market) retailers will pass those savings onto us. So in a week or two we might see petrol at more like $1.80 per litre, which is better I guess.
Frydenberg hinted the 2022 budget would include one-off cash payments for income earners as a little treat.
Economists predicted one-off payments of between $200 to $400 could be on the way to all or some working Australians.
“My guess is it’ll probably be something like some kind of direct payment that’s means-tested,” UNSW Professor of economics Richard Holden told 7News.
The government also pledged cash bonuses of up to $800 for aged care workers made in two instalments of up to $400 each from March 1.
Taxes and possible tax cuts (for the rich tho, ha ha)
It’s possible the low- and middle-income tax offset (LMITO), which gives workers bonuses in their tax returns, could be extended.
The offset was introduced in the 2021 budget and gave people earning below $126,000 annually a bonus of between $255 and $1080 at the end of the last financial year.
It was a nice gesture, but the way it was scaled was fucking stupid. Basically the more you earned up to that threshold, the more you got in your tax return because apparently rich people spend more and therefore stimulate the economy more, despite actually needing less money.
Chief economist at the Australia Institute Richard Denniss said the cuts last year didn’t do much for young people and if they were included in the 2022 budget they probably wouldn’t change much.
“The shape of tax cuts has been very generous to high-income earners, who are more likely to be older,” he said.
“The reality is that lower-income workers, of which young people dominate, they’ve got far less.”
The government hinted at the offset being extended before it would be eventually phased out, but on Sunday it suggested it would potentially be replaced with high-cost-of-living compensation payments.
“Our budget will be responsible. It will have practical measures. It will ease the cost of living pressures right now, as well as putting in place a long-term economic plan for the nation,” Frydenberg said.
Economists also predict the new tax bracket system could be delayed.
Part of the 2021 budget plan to phase out the LMITO was to create new tax brackets that meant people earning six-figure salaries were taxed less.
Under the new system due to come into effect in the 2024-25 financial year, people earning anywhere from $45,000 and $200,000 would be taxed at the same 30 per cent rate.
Basically if you earn $50k nothing changes, but if you earn $150k, lucky you, you’ll soon be taxed at a lower rate and could save up to $9000 a year.
“There’s no doubt that over the past decade, the shape of tax cuts that have been introduced have been for older people who are higher-income earners disproportionately than lower-income earners,” Denniss said.
All in all, it’ll come as absolutely no surprise to anyone if young people and low-income earners get little to no help from the Coalition’s 2022 budget if re-elected, while Frydenberg and Scott Morrison instead help out their rich mates.
All will be revealed at 7:30pm AEDT.