Budget 2022: One-off payments, tax cuts and offsets you could receive

It’s a Budget before an election and that means you could see some of those sweeteners flow through to your bank account not in months – but days.

With an election just around the corner, the government is wasting no time with its Budget bounty.

The first $250 one-off payments to struggling households, worth up to $1.5 billion overall, could start dropping into bank accounts within days.

And Prime Minister Scott Morrison will be eagerly hoping that a halving of petrol excise will see prices at the pump plummet in the next fortnight.

Both measures are part of a huge $8.6bn budget cash splash designed to make Aussies feel better off.

A bevy of these boosts to family budgets will kick in before an expected May election. The Coalition will be hoping that translates to a few more votes in its direction in what is shaping up to be an incredibly tight poll.

Treasurer Josh Frydenberg told parliament on Tuesday night that “our economic plan is working”.

“This is not a time to change course. This is a time to stick to our plan.”

But even Mr Frydenberg admitted that many of the cash handouts were “temporary” and designed to relieve cost of living pressures right now, rather than being long term economic measures.

Shadow Treasurer Jim Chalmers said it was a “more of a pamphlet than a plan”.

It was a “desperate political poly,” he added and was a Budget that had a “shelf life of six or seven weeks”. Or, in other words, up to the election.

Treasurer Josh Frydenberg was all smiles as he delivered the Budget in the House of Representatives at Parliament House on March 29, 2022

First Budget boost you’ll see

The tax cuts and cash handouts announced in the Budget add up to some $8.6bn. And that excludes billions more earmarked for defence spending, the regions and infrastructure.

The first cash cab off the rank is likely to be a one-off cost-of-living $250 payment for those “most in need,” said the Treasurer.

“Pensioners, carers, veterans, job seekers, eligible self-funded retirees and concession card holders will benefit.

“Together with existing indexation arrangements this will see a single pensioner receive more than $500 in additional support over the next six months, just when they need it most.”

The tax-exempt payment, which will cost the budget $1.5 billion, will be made automatically to eligible recipients in April.

Given April begins on Friday that payment could potentially be in bank accounts within days. Although, equally, it could take until the end of April to filter through.

As such, that dollop of dosh could be pipped at the post by the petrol excise cut.

Petrol cut within next two weeks

As petrol prices reach record levels, touching $2.30 in some cities, the government will slash the 44.2 cents per litre fuel excise by half for six months, to 22.1 cents.

The reduction in excise, which is paid at the wholesale level by fuel retailers, comes into effect from midnight on Tuesday but will take up to two weeks to flow through to lower prices at the petrol pump, as existing fuel stocks flow out of the system.

“A family with two cars who fill up once a week could save around $30 a week or around $700 over the next six months,” Mr Frydenberg said.

“Whether you’re dropping the kids at school, driving to and from work or visiting family and friends, it will cost less.”

Cuts to petrol prices could occur within days. Picture: NCA NewsWire / Flavio Brancaleone

Lamington offset turbocharged

Another big announcement was the so called “lamington offset”.

It’s not really called that. It’s actually the low and middle income tax offset (LMITO) which kind of looks a bit like the name for a famous coconut covered cake, if you squint a bit.

Under the turbocharged lamington offset more than 10 million Australians earning less than $126,000 a year will receive a one-off $420 cost-of-living tax offset, in addition to the existing $1080 LMITO.

“Individuals already receiving the low and middle income tax offset will now receive up to $1500 and couples up to $3000 from July 1 this year,” Mr Frydenberg said.

The total offset will depend on household incomes. But for example, a couple living together earning $90,000 and $63,000 a year, for a combined income of $153,000, would receive a total reduction in their tax bill of $3000 when they lodge their return – $840 more than they would have without the increase.

The measure will cost the budget $4.1 billion over the next two years.

Childcare and PBS boosts

There were some other sweeteners in Mr Frydenberg’s goodie bag.

Childcare subsidy increases brought forward from July 1 to March 7 will leave the average family more than $2200 per year better off.

New mums and dads will also now be able to access a combined 20 weeks of paid parental leave under a major overhaul of the scheme designed to offer greater flexibility for young families.

Australians will also benefit from greater access to subsidised medicines, with the government spending $525.3 million to lower Pharmaceutical Benefits Scheme (PBS) safety net thresholds from July 1.

Thousands more first home buyers will be able to get into the market with just a 5 per cent deposit. The Home Guarantee Scheme will be made permanent and be expanded from 20,000 places to 50,000.

Regional Australians will benefit from more than $10bn in targeted spending this budget. While defence gets $10bn too for measures to curb foreign interference and fight hackers and spies. It also gets a whole heap more for a new submarine base and to increase troop numbers by around 20,000.

Shadow Treasurer Jim Chalmers said it was Budget designed to last only up to election day. Picture: Caitlan Charles

Labor: ‘Budget has a shelf life of six or seven weeks’

Mr Frydenberg said the Budget was a plan “that delivers cost of living relief now.”

“A plan that creates jobs for the long term. A plan that guarantees the essential services. A plan that invests more in the defence of our nation.”

Interviewed on ABC’s 7.30, Labor’s Mr Chalmers said the opposition would back measures to relieve the cost of living with “prices going through the roof”.

But he was dismissive of the Coalition’s motives.

“The government is now pretending to care about those costly pressures because Scott Morrison has to call an election in the next fortnight,” the Shadow Treasurer said.

“It is the most shortsighted Budget in memory – it has a shelf life of about six or seven weeks.”

“It doesn’t make up for the fact that people’s real wages are falling.

“It’s very desperate, very panicked and I think the country deserves much better.”

Originally published as Budget 2022: One-off payments, tax cuts and offsets you could receive