Our Response to the 2022 Federal Budget

Budget photo

The Federal Budget handed down by Treasurer Josh Frydenberg on Tuesday night was an unsurprising pre-election pitch with an $8.6 billion cost-of-living package delivered against a backdrop of stagnant wage growth and the need to mitigate the risk of fuelling inflation.

There was a splash of cash in the form of bonus tax rebates for low and middle-income earners, a temporary halving in petrol tax, and one-off cash payments to pensioners and welfare recipients – amongst other initiatives.

The message for mortgage and finance brokers, from Australia’s largest aggregator, Connective, is to look beyond the immediate financial incentives and consider the impact and opportunity generated from changes to financial support in the housing market and initiatives for small businesses.

Connective Executive Director, Mark Haron, said, “We welcome the extension and expansion of the home guarantee scheme partnered with the launch of a new Regional Home Guarantee scheme and we encourage brokers to be talking to their clients and prospects about the opportunity.

“The Home Guarantee Scheme, including the First Home Guarantee and the Family Home Guarantee has expanded to 50,000 places a year. A Regional Home Guarantee has been introduced to support borrowers in regional areas to buy or build a new home with a minimum deposit of 5%, while the government guarantees 15% of the property purchase price.

“Based on what we’ve seen historically, these schemes will be snapped up quickly – the opportunity for brokers to proactively connect with borrowers and help educate them on the support available to them, is right now,” said Haron.

Brokers can also benefit from budget measures for small businesses, including an increase in the tax deduction for investment in training and technology.

“We encourage brokers to understand what the budget means for their business as well as what it means for their clients. Our research tells us that investing in the right technology, and the skills to get the best out of that technology, is a top priority for brokers.

“With a 20 percent increase in the tax deduction – from $100 to $120 for every $100 spent – for investment in training and technology, brokers could consider investing in their website or cyber security protection or upskilling staff.”

“We would’ve liked to see an extension or permanent implementation of the instant asset write-off scheme that was extended to 2023 in last year’s budget, to provide greater certainty and confidence for small businesses to invest.

“However, this does highlight the opportunity for our asset finance brokers to support their clients and strengthen their pipeline in 2022 with the existing instant asset write off available to 99% of businesses.

“The Budget sets the economic agenda. Brokers need to understand the opportunities that are available to them on critical issues that can affect their clients, the businesses of their clients, and their own business.

“Having a good understanding of the Budget and its implications can help brokers to strengthen their relationships with clients by building trust, identify opportunities for growth, and drive better results,” concluded Mr Haron.