Update 1 June 2022
This month our Financial Planning Expert, Tony Marshall looks at the impact of the recent election and what Australians can expect.
The Business Growth Fund (BGF) targets high-growth businesses that can accelerate growth, drive Queensland's economy and employ more Queenslanders. The grant opened for EOI applications at 9am, 31 May 2022.
Single Touch Payroll (STP) reporting has been expanded. This expansion is known as STP Phase 2. If you have employees, you will need to start reporting extra information to the ATO each time you run your payroll.
From 1 July 2022 you will need to pay super for employees, regardless of how much you pay them. This is because the $450-per-month threshold for super guarantee (SG) eligibility is being removed.
Tax time is around the corner and we are here to help you get prepared.
The WD Nicholls Team
Australia has a new government.
Today we sit down to see what impact the election may have on our share market (source: Shane Oliver from AMP). The ALP won the election and is set to Govern most likely in its in own right or as a minority government. So if we look into their election campaign this is what we can expect:
Faster climate action with a 43% cut to emissions below 2005 levels by 2030 versus the Coalition’s 26-28% cut. This could be increased under pressure from Greens and “teals”.
This includes investing $20bn in electricity infrastructure and boosting renewables to 82% of electricity by 2030.
An extra $2.5bn per annum in aged care funding.
An extra $750m on Medicare.
Raise the childcare subsidy to 90% for the first child in care.
Create 20,000 more university places & free TAFE places.
Support for manufacturing with a $15bn National Reconstruction Fund and Federal procurement programs.
Housing support policies with: a $10bn Housing Australia Fund to build 30,000 social homes over five years; a Help to Buy scheme with the Government to take up to 40% equity in up to 10,000 first home buyer home purchases a year; and the establishment of a National Housing Supply and Affordability Council to help boost supply.
Encourage the Fair Work Commission to raise the Minimum Wage by 5.1%. This would normally flow through to 2.6m workers on awards and raise concerns about a wage-price spiral, but PM Anthony Albanese has suggested it would only cover those on the minimum wage which is 180,000 workers.
The ALP proposed no tax hikes apart from measures to tax multinationals more. But it’s not committing to the 23.9% Coalition cap on the tax to GDP share and wants to shift the focus to the “quality” of spending, suggesting a somewhat higher tax and spending share of GDP over the long term.
What happens in sharemarkets. Since the 1980s there has been a tendency for Australian shares to rise after elections, as uncertainty is removed.
Source: Reuters, AMP
The next table shows that 3 months after the last 14 elections the share market saw an average gain of 4.5%.
Based on All Ords index. Source: Bloomberg, AMP
Since WW2 Australian shares have performed better under Coalition Governments, although the Whitlam and Rudd/Gillard Governments had the misfortune of severe global bear markets and the reformist Hawke/Keating period saw the strongest returns of any post-war government.
Source: ASX, Reuters, Bloomberg, AMP
For the Australian dollar since 1983 the average post-election response has been sideways to down slightly, but nothing to get excited about.
Implications for investment markets this time around
Labor’s macro policies not being significantly different from the Coalition’s and its victory not being a surprise suggests that the market reaction to the new Government will be minor and that investment markets will quickly move on to other things. With the share market down 3.5% over the last 8 weeks, there is potential for a rebound ahead as political uncertainty is reduced but the Australian share market remains vulnerable to ongoing global concerns about inflation, interest rates, and recession and these will likely dominate.
Industry sectors likely to benefit from the change in Government include clean energy, health, education, home builders & manufacturing, whereas heavy carbon emitters may lose.
With regards to markets globally we have continued to see negative sentiment plague equity and interest markets.
The Business Growth Fund (BGF) targets high-growth businesses who can accelerate growth, drive Queensland's economy and employ more Queenslanders.
Round 4 documents:
Grant rounds
Each round of the Business Growth Fund grants program has specific information to help you prepare and apply for the grant, and if successful, manage your grant.
The Business Growth Fund (BGF) targets high-growth businesses that can accelerate growth, drive Queensland's economy and employ more Queenslanders. It provides funding for small and medium-sized high-growth businesses to buy specialised equipment, enabling them to unlock growth potential, increase production, expand their workforce, and maximise economic returns to move them to the next stage of growth.
Funded businesses are expected to:
increase confidence for growth, transitioning from small to medium-sized
increase productivity, turnover, profit, and employment by 20%
improve confidence to automate, scale up, increase market share, diversify and/or exploit exporting opportunities.
The program is administered by the Department of Employment, Small Business and Training (DESBT).
Available funding
You may be eligible for a single up-front payment of up to $50,000 (excluding GST), and not less than $25,000 (excluding GST).
Successful applicants must co-contribute at least 25% of project costs.
The DESBT will not fund projects with:
a total cost of less than $33,333 (excluding GST)
or
payments made before the approval date (you must be approved before you pay for grant-funded project activities).
The table below shows the breakdown of total project costs and the co-contribution amounts.
Application process
The application process includes 3 stages:
Stage 1: Expression of interest
Stage 2: Full application
Stage 3: Pitch
Stage 1 opened for expressions of interest (EOI) at 9am, 31 May 2022. Stage 1 EOIs may close while you are mid-application. Before you submit, your application must be complete and every question validated.
Stage 1 will close for EOI applications at 5pm, 30 June 2022 or when we receive sufficient applications for a competitive assessment. Not all applications will be funded.
How to apply
The grant opened for EOI applications at 9am, 31 May 2022. Submit your application by completing these steps.
Read the key documents and information:
Check your eligibility.
Apply for a DESBT SmartyGrants applicant account (if you don't have one already).
Ensure your Australian Business Register profile for your business is up to date (check your ABN status, GST status and main business location)
Review the sample EOI application form and prepare your answers.
Submit your application.
Single Touch Payroll (STP) reporting has been expanded. This expansion is known as STP Phase 2. If you have employees, you will need to start reporting extra information to us each time you run your payroll.
Some digital service providers needed more time to update their products and have applied for deferrals, which cover their customers. This means that when you can start Phase 2 reporting depends on when your payroll product is ready. If you haven't already started Phase 2 reporting, make sure you ask your provider when their product will be ready if you don't already know.
As an employer, it's important that you're across the changes required, and you're getting ready to start Phase 2 reporting. This includes:
checking if you need to make changes to payroll pay codes/categories so they align with Phase 2 requirements
reviewing allowances you pay and how they need to be reported in Phase 2
understanding changes to salary sacrifice reporting
understanding how to assign an income type to each payment.
Amounts paid to closely held payees should now be reported through STP. There are concessional reporting options for closely held payees reporting which include:
reporting actual payments on or before the date of payment (along with your arm's length employees)
reporting actual payments quarterly
reporting a reasonable estimate quarterly.
Source and credit: ATO.gov.au
From 1 July 2022 you will need to pay super for employees, regardless of how much you pay them. This is because the $450-per-month threshold for super guarantee (SG) eligibility is being removed.
This change doesn’t affect other eligibility requirements for SG. Workers who are under 18 still need to work more than 30 hours in a week to be eligible.
An employee’s eligibility for SG is determined by when they are paid salary and wages, not when they earn the income. This means, if you pay an eligible employee on or after 1 July 2022, the new rules will apply to the full amount, regardless of whether some or all of the pay period it relates to is before 1 July.
Check your payroll and accounting systems are updated from 1 July so that you continue to pay the right amount of super for your employees.
If this change means you'll be paying SG for an employee for the first time, you'll need to follow the choice of super fund rules.
Find out more
Source and credit: ATO.gov.au
If you wish to arrange a telephone appointment or zoom meeting with one of our team please contact our office either by telephone or email.
21 June 2022 May monthly BAS due