Last night the Treasurer, Josh Frydenberg handed down the Federal Budget – declaring Australia’s economic engine is “roaring to life” with a quicker than expected economic recovery. As a result, the budget focuses on Australia’s pandemic recovery.
In particular, there is an emphasis on addressing skills shortages as well as including a “women’s budget statement” which allocates $3.4 billion to improve women’s health, safety and economic security.
The key announcements are:
1. An extension to business write-offs for another year. This means businesses with aggregated turnovers of less than $5 billion can claim an immediate deduction for the full value of eligible depreciating assets used or installed ready for use by 30 June 2023.
2. Temporary loss carry-back rules have also been extended for a further 12 months. This will allow eligible companies to use losses from the 2022-23 financial year to offset tax paid on profits from 2019 and subsequent years.
3. Childcare to receive an additional $1.7 billion over the next 3 years to support the financial wellbeing of families. The $10,560 cap will be abolished with subsidies introduced for families with 2 or more children attending childcare.
4. An extra $1.9 billion has been dedicated to the COVID-19 vaccine rollout along with $35.8 million for the temporary community pharmacy program to administer COVID-19 vaccines to Phase 2 and 3 candidates.
5. The $450 per month threshold for Superannuation Guarantee eligibility has been removed. All employees will need to be paid the super guarantee regardless of the income earned. The expected start date for this initiative is 1 July 2022 but it could be earlier.
6. A $17.7 billion boost for the aged care sector in response to the Aged Care Royal Commission and full funding for the NDIS with an additional $13.2 billion promised over the next 4 years.
7. $354 million dollars has been allocated to various women’s health initiatives.
8. An additional $2.3 billion to go to the National Mental Health and Suicide Prevention Plan.
9. $11.5 million to fund the extension of the Home Medicines Service and support medications included on the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme. Over the next 4 years PBS payments are expected to increase to $852.5 million.
10. The Australian Digital Health Agency has been allocated $421.6 million to work on the My Health Record.
11. The Low and Middle Income Tax Offset (LMITO), which is worth up to $1,080 per individual, has been extended for another year.
12. JobTrainer will receive a further $500 million over 2 years from 2021-22 as long as states and territories match that funding.
13. The HomeBuilder Grant will be reopened with an extension to the construction commencement requirement from 6 months to 18 months. This is designed to widen the number of eligible applicants.
Mr Frydenberg made it clear this budget is focused on driving economic recovery as “We are in the middle of a pandemic”. So national debt is anticipated to climb to $1 trillion by 2025 with no plans to cut government spending until unemployment falls below 5%.
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