Federal Budget Summary October 2022

A high level overview of the Federal Budget October 2022

At a high level, this budget contained a range of very specific measures targeting taxation, superannuation, housing and social security but no wholesale tweaking or reforms that really enter conversations on wealth creation and retirement funding strategies. The following summary is not complete and focusses only on the specific taxation, superannuation and social security measures. Some of the following announcements are described in more detail further on in this report.

Taxation

• Personal tax rates remain unchanged for 2022-23 and the already legislated Stage 3 tax cuts starting from 2024-25 unchanged.

• Cryptocurrency is not a foreign currency – as governments around the world tackle with how to assess gains and losses on crypto, the Government will introduce legislation to clarify that digital currencies (such as Bitcoin) continue to be excluded from the Australian income tax treatment of foreign currency.

Superannuation

• Super downsizer contributions – the government confirmed that it will reduce the eligibility age to 55 (60 currently).

• SMSF residency changes - the proposal to extend the central management and control (CM&C) test safe harbour from 2 to 5 years, and remove the active member test, will now start from the income year commencing on or after assent to the enabling legislation (previously 1 July 2022).

• SMSF audits every 3 years - the Government will not proceed with the former government's proposal to allow a 3-yearly audit cycle for SMSFs with a good compliance history.

• Retirement income products - the Government will not proceed with the proposal to report standardised metrics in product disclosure statements (PDSs).

Social Security and housing

• Affordable housing measures – the Government will establish a Regional First Home Buyers Guarantee Scheme and a Housing Australia Future Fund.

• Housing Accord - targeting 1 million new homes over 5 years from 2024. The Government will commit $350m over 5 years to deliver 10,000 affordable dwellings. The Accord has been struck between State and Territory governments and investors and will include super funds.

• Paid Parental Leave (PPL) scheme - to be expanded from 1 July 2023 so that either parent can claim the payment. From 1 July 2024, the scheme will be expanded by 2 additional weeks a year until it reaches a full 26 weeks from 1 July 2026.

• Child care subsidy - maximum CCS rate to be increased from 85% to 90% for families for the first child in care and increase the CCS rate for all families earning less than $350,000 in household income.

General Advice Warning

The information in this presentation contains general advice only, that is, advice which does not take into account your needs, objectives or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial advice that addresses your specific needs and situation before making investment decisions. While every care has been taken in the preparation of this information, Infocus Securities Australia Pty Ltd (Infocus) does not guarantee the accuracy or completeness of the information. Infocus does not guarantee any particular outcome or future performance. Infocus is a registered tax (financial) adviser. Any tax advice in this presentation is incidental to the financial advice in it. Taxation information is based on our interpretation of the relevant laws as at 1 July 2020. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Any case studies included are hypothetical, for illustration purposes only and are not based on actual returns. Infocus Securities Australia Pty Ltd (ABN 47 097 797 049) AFSL No. 236 523.