The 2020-21 Federal Budget is a road to recovery paved with cash.
Key initiatives include:
- Personal income tax cuts from 1 July 2020
- A $4 billion ‘JobMaker’ Hiring Credit to encourage businesses to take on additional employees aged 16 to 35 years old
- $110 billion in infrastructure investment over 10 years
- Immediate deductions for business investment in capital assets
- Changes to how companies can manage losses
- Access to generous tax concessions for a wider range of businesses
- The Budget also contains two additional Economic Support payments to pensioners and other eligible recipients to drive money back into the economy.
Some of the measures are aimed at addressing the harsh lessons COVID-19 has taught us and seek to centralise production back in Australia to ensure our industries can be self-reliant.
Outside of the big ticket tax measures, what is striking about this Budget is the sheer volume of initiatives it funds. Many of the initiatives aim to improve how Government interacts with the community and business in particular. This funding is focused on streamlining interaction and compliance with Government requirements and investing in the IT infrastructure required to digitise the compliance process.
The final comments in the Treasurer’s Budget speech paint a cautionary tale. The focus right now is on the path to growth and stabilising debt in an effort to boost consumer and business confidence. However, once “recovery has taken hold and the unemployment rate is on a clear path back to pre-crisis levels” of below 6%, the second phase will kick in – the deliberate shift from providing temporary and targeted support to stabilising debt.
Check out our 2020-21 Budget Summary white paper to learn more about this year’s initiatives.
For any questions you might have about the Budget announcements and their implications to you or your business, please contact us.