At 7:30pm tonight, Josh Frydenberg delivered his fourth budget announcing that “the last 2 years have been tough for our country, there have been set backs along the way, but Australia remains resilient, Australia remains strong. We have overcome the biggest economic shock since the great depression. Our recovery leads the world.”

The Treasurer said that “a strong economy means a stronger budget and this is what we deliver tonight.” Tonight’s budget delivered cost of living relief now, a long term economic plan that creates more jobs, record investments in essential services, and stronger defence and national security.

Key Forecasts

• $79.8B deficit for 2021-22, $78B deficit for 2022-23, $56.5B deficit for 2023-24, $47.1B deficit for 2024-25, and $43.1B for 2025-26;
• $631.5B net debt for 2021-22, $714.9B net debt for 2022-23, $772.1B net debt for 2023-24, $823.3B net debt for 2024-25, and $864.7B net debt for 2025-26;
• 4% unemployment is expected for 2021-22, 3.75% for 2022-23, 3.75% for 2023-24, 3.75% for 2024-25, and 4% for 2025-26.
• 2.75% wages growth is expected for 2021-22, 3.25% for 2022-23, 3.25% for 2023-24, 3.5% or 2024-25, and 3.5% for 2025-26.
• 4.25% inflation is expected for 2021-22, 3% for 2022-23, 2.75% for 2023-24, 2.75% or 2024-25, and 2.5% for 2025-26.

Key Financial and Tax Changes

This budget was focused around reducing the cost of living and the Treasurer announced the following to achieve cost of living savings:

• From midnight tonight, the fuel excise will be halved from 44.2c to 22.1c per litre. This cut will last for 6 months until 28 September 2022 and will save on average $15 per tank of fuel;
• From 1 July 2022, a one-off tax saving of $420 will apply to taxpayers who receive the low and middle income tax offset. This offset will increase by $420 and will apply as follows:
  

  Taxable Income	Tax Offset Amount
  $37,000 or less	$675
  $37,001 to $48,000	$675 0 $1,500
  $48,001 to $90,000	$1,500
  $90,001 to $125,999	$420 – $1,500

• In April 2022, eligible Australians, including pensioners, welfare recipients, veterans, and concession card holders, will receive a one-off $250 cost-of-living payment;
• From 1 March 2023, eligible working parents and single parents will be able to access 20 weeks of paid parental leave with a combined household income limit of $350,000 to be eligible for the paid parental leave;
• From 7:30pm tonight until 30 June 2024, small businesses can claim a tax deduction of an extra 20% on expenditure on external training courses and on $100,000 worth of digital work expenses per year i.e. an eligible expense of $1,000 will attract a tax deduction of $1,200;
• From 1 July 2022, payments of $5,000 will be made to new apprentices in priority industries over their first 2 years of their apprenticeship;
• From 1 July 2022, wage subsidies of 10% for first and second year apprentices and 5% for third year apprentices will be paid to employers of apprentices in priority occupations. The wage subsidy will be up to $15,000.