2020-21 Budget News

07Oct 2020-21 Budget News

Last night Treasurer Josh Frydenberg has delivered what could be his most important Budget yet with a splash of cash to attempt to bring the country out of recession.

In 2020, Australians have been tested like never before. Flood, drought, fires, and a global pandemic.

With last night’s Budget announcement, the Government has reduced fears of a shortfall, with a variety of measures to support businesses, their workers, as well as to foster more investment in targeted areas.

Key takeaways for business owners from the Budget:

  • The Budget includes tax cuts for most workers, primarily by bringing forward income tax cuts scheduled for the middle of 2022. The low and middle income tax offset has now been extended to 2020-2021.
  • Almost $9bn given to a tax loss carry-back scheme, allowing businesses to generate a refund from tax losses incurred against earlier profits.
  • The Instant Asset Write-off has been expanded to ‘Temporary Full Expensing’ – meaning 99% of businesses will be able to write off the full value of eligible assets.
  • A JobMaker hiring credit will incentivise businesses to employ additional young workers in order to receive $200 per week per eligible hire under 30 years old. This is estimated to impact 450,000 people in an attempt to prevent young Australians falling into long term unemployment and get them back to work.
  • $1.2bn to create 100,000 new apprentices and trainees.
  • Additional $2bn for research and development incentives.
  • $800m to make moving online easier for businesses.
  • Tax concessions and changes to fringe benefits tax (FBT).

As part of further support for people not in work, the Government will offer two more tax-free payments of $250 to pensioners and others on government support.

The Budget estimates the headline unemployment rate will peak at 8 per cent between now and the end of the year. It is forecast to begin falling after that point, reaching 6 per cent in 2022-23.

The Treasurer has said the Government will not focus on reducing the debt until employment has reached that benchmark.

The Budget also predicts wages growth will remain stagnant, meaning the money you take home in pay is unlikely to rise rapidly in the near future.

If ever there was a time for a “break glass in case of emergency” budget, this was it. Coronavirus has put a wrecking ball through the economy, and that means there’s never been a more relevant budget for Australians.

Making sense of the detail can be overwhelming so please dont hesitate to contact us on 08 8211 9426 for further information.

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