Australia

Electric car discount

The Government intends to cut taxes on zero or low emissions vehicles including electric cars, hydrogen fuel cell electric cars and plug-in hybrid electric cars. This will be achieved by exempting these vehicles from FBT and import tariffs, provided the cars have a first retail price below the luxury car tax threshold for fuel-efficient vehicles (currently $84,916).

These measures may present an opportunity for individuals to purchase cars through a tax-effective salary sacrifice arrangement with their employer, though any exempt car fringe benefits amount would need to be included in the employee’s reportable fringe benefits amount.

These measures are intended to apply to cars first held or used after 1 July 2022.

“Startup Year” program

The Government will provide $15.4 million of HELP-style loans to approximately 8,000 university graduates and undergraduates over 4 years to participate in a one-year, business-focused accelerator program with an approved Australian higher education provider.

These measures are designed to encourage innovation and collaboration between higher education providers, industry and the startup community.

Reversal of tax depreciation measure for intangible assets

The Government has announced that it will reverse the previously proposed measure allowing taxpayers to self-assess the effective life of intangible depreciating assets.

The measure was announced in the 2021-22 Budget and proposed to allow taxpayers to self-assess the effective life of certain intangible assets, such as patents, registered designs, copyrights and in-house software.

These types of intangible assets will continue to be depreciated using the prescribed tax effective lives ranging from 20 years for standard patents, to 5 years for in-house software (such as website development).

Energy efficiency grants for SMEs

From 2023, the Government will provide $62.6 million over 3 years to assist small to medium enterprises to fund energy efficient equipment upgrades.

The funding will support studies, planning, equipment and facility upgrade projects that will improve energy efficiency, reduce emissions or improve the management of power demand.

Related budget analysis

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