October 2022-2023 Budget
Last week, Treasurer Jim Chalmers handed down Labor’s October 2022-2023 Federal Budget.
This budget was an update from the previous liberal federal budget and there were no real tax changes that affect small businesses.
The bad news is interest rates and labour costs are rising and with high inflation levels, many businesses will receive very little assistance from the government.
A few key points that we think are relevant to you and your pharmacy:
Cheaper Medicine
From 1 January 2023, the maximum co-payment amount for PBS listed medicines will decrease from $42.50 to $30. This has now been approved in parliament and will continue to give pharmacists the option to discount medicines to general patients, while supplying it as a PBS script.
Despite the limited support from the government for small businesses, the cut to the PBS co-payment is welcomed for the pharmacy industry. Politicians have praised pharmacists for their role in the community and have listened to ensure a greater access to affordable medicine.
Paid Parental Leave
The Government has committed to $531.6 million over four years in a bid to improve the flexibility of paid parental leave. From 1 July 2024, the Government will start expanding the scheme by two additional weeks a year until it reaches a full 26 weeks from 1 July 2026.
The scheme will now allow either parent to claim the payment concurrently on a ‘use it or lose it’ basis to incentivise both parents to access it.
Cheaper Childcare
The Government announced that $4.7 billion to deliver cheaper childcare. These measures aim to help ease the cost of living for families and reducing barriers to greater workforce participation.
Although it is expected this will get more full-time workers back in the workforce, the understaffed childcare industry will be required to care for even more children and will also have greater compliance and reporting requirements.
Increased Tax Compliance
Further to our last Federal Budget blog, the ATO has extended funding for additional compliance programs. Amongst others, the government is allocating $80.3 million to extend the Personal Income Taxation Compliance Program for 2 years, commencing on 1 July 2023 with greater penalties in place. This program targets non-compliance, including the overclaiming of deductions and the incorrect reporting of income.
During Covid, the ATO were more lenient, however these measures show the ATO will be cracking down, so it is important all tax deductions are substantiated, and all income is reported accurately.
Conclusion
No doubt families are the winners for these budget announcements, especially with the increased cost of living pressures, the lowering of the PBS co-payment is a much-needed saving for many families, especially for households filling multiple scripts each month.
Written by Marcus Evitt
