October 2022 Federal Budget Report: Powered by Weekly Tax Bulletin

On Tuesday, 25 October 2022, Treasurer Jim Chalmers handed down the 2022-23 October Federal Budget, his 1st Budget.

This second Budget for 2022-23 updates economic forecasts and outlines the new Labor Government’s priorities following the May 2022 Federal election.

While the economy is expected to grow by 3.25% in 2022-23, it is predicted to slow to 1.5% for 2023-24, a full percentage point lower than forecast in March 2022. Inflation is expected to peak at 7.75% later in 2022, but is projected to moderate to 3.5% through 2023-24, and return to the Reserve Bank’s target range in 2024-25.

Against this backdrop, the Treasurer has sought to exercise fiscal “restraint” so as not to put more pressure on prices, and make the Reserve Bank’s job even harder. Rather, the Budget sets out a 5-point plan for cost-of-living relief in the areas of:

• childcare;
• expanding paid parental leave;
• medicines;
• housing;
• getting wages moving.

While the Budget does not contain major tax changes it does seek to begin some “Budget repair work” via tax integrity measures.

"This can be seen as almost a ‘clearing of the decks’, setting the Government up to make big ticket changes in future Budgets."

This report is brought to you by the Thomson Reuters Tax Division for the Weekly Tax Bulletin.

Ian Murray-Jones, Thomson Reuters