Self-funded retirees benefit from pre-election Budget sweeteners

Some self-funded retirees stand to be among the beneficiaries of measures to lower tax instalments in 2022-23 announced by the Treasurer, Josh Frydenberg, ahead of next week’s Federal Budget.

The Treasurer announced that the Government would set the GDP uplift rate applying to pay-as-you=go instalments and GST instalments 2% for the 2022-23 income year – a rate significantly lower than the 10% rate that would have applied under the usual formula.

The Government’s announcement said the lower uplift rate would mean lower instalments, delivering $1.85 billion in cash flow support for 2.3 small to medium businesses, sole traders and individuals with passive incomes.

It said that those with passive incomes included some self-funded retirees.

The announcement said the measure would apply to the 2022-23 income year, in respect of instalments that fall due after the enabling legislation receiving Royal Assent.

The measure has already been welcomed by the Tax Institute which said it was a welcome move in the present environment.

The Tax Institute’s general manager, Tax Policy and Advocacy said the uplift of 10% which the Government had indicated would otherwise have been the case would have been an unnecessary burden on many small businesses.