Main points in the 2020/21 federal budget

A SUMMARY OF THE 2020 FEDERAL BUDGET

ECONOMY

* Budget deficit of $213.7 billion in 2020/21

* Deficit narrows to $112 billion in 2021/22, $87.9 billion in 2022/23 and $66.9 billion in 2023/24

* Commonwealth net debt to rise to $703.2 billion in 2020/21 before hitting $966.2 billion in 2023/24

* Economic growth to fall by 1.5 per cent in 2020/21 before expanding by 4.75 per cent in 2021/22

* Unemployment rate of 7.25 per cent in 2020/21, before falling to 6.5 per cent the following year

* Inflation as measured by CPI to be 1.75 per cent in 2020/21

 

TAXATION

* Extra $12.5 billion in personal income tax relief over the next 12 months

* In 2020/21, low and middle income earners will get tax relief of up to $2,745 for singles and up to $5,490 for dual income families

* When the plan is fully rolled out in 2024/25 around 95 per cent of taxpayers will have a marginal tax rate of 30 per cent or less

* A $2 billion research and development tax incentive to apply from July 1, 2021

 

TAXABLE INCOME (TAX SAVING IN 2020/21)

$40,000 ($1,060)

$60,000 ($2,160)

$80,000 ($2,160)

$100,000 ($2,445)

$120,000 ($2,745)

$140,000 ($2,565)

$160,000 ($2,565)

$180,000 ($2,565)

$200,000 ($2,565)

 

BUSINESS

* From budget night to June 20, 2022, businesses with a turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed.

* Loss ‘carry-back’ will also be available to around one million companies, with losses incurred up to 2021/22 carried back against profits made in or after 2018/19.

* Changes to fringe benefits tax

* Small and medium businesses can access up to 10 tax concessions

 

HOUSING

* An extra 10,000 places in 2020/21 under the First Home Loan Deposit Scheme to buy a new home or newly-built home

* These first home buyers can secure a loan with a deposit of as little as five per cent, with the government guaranteeing up to 15 per cent of a loan

* $1 billion increase in the government guarantee to the National Housing Finance and Investment Corporation to support more affordable housing

 

INFRASTRUCTURE

* Boosting infrastructure spending to $110 billion over the decade

 

THE BUSH

* $328 million to help agricultural exporters and the recovery from drought, bushfires and COVID-19

* Digital platforms to make it easier for exporters to access overseas markets

* $550 million regional package to support tourism, rural health workforce, manufacturing and technology

 

YOUNG WORKERS

* JobMaker hiring credit to support around 450,000 people aged between 16 and 35 get into work, at a cost to the budget of $4 billion

* The credit of up to $200 a week will be available to employers for each new job they create over the next 12 months

* $1 billion JobTrainer fund will support up to 340,700 free or low-fee training places

* $1.2 billion to subsidise apprentice wages

 

WOMEN

* $240.4 million package to deliver job opportunities, support parents and increase participation in STEM industries

 

HEALTH

* $4.9 billion in health measures to deal with the coronavirus pandemic, including support for hospitals, protective equipment and vaccines and treatments

* $750 million for COVID-19 testing

* $112 million to continue Medicare-funded telehealth

* Extra $746.3 million to support senior Australians in aged care, workers and providers to respond to the pandemic

 

PENSIONERS

* $2.6 billion for two additional payments of $250 to pensioners and other eligible recipients

 

ENVIRONMENT

* $249.6 million over four years to modernise recycling infrastructure, reduce waste and recycle more

* $47.4 million ocean health package

* $29.1 million to clean up contaminated land

 

SUPERANNUATION

* Ability to keep your superannuation fund when you shift employers, effectively “stapling” the fund to the worker

 

SECURITY

* Extra $201.5 million to deliver a cyber security strategy, with new investment in training

 

We hope you find this information useful. If you would like to discuss the announcements and the possible implications in relation to your financial strategy, feel that you or anyone you know requires advice, or would simply like a review of your financial situation, please visit our contact page call our office today to arrange an appointment on (07) 5574 0667.

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Disclaimer

The information has been given in good faith and has been prepared based on information that is believed to be accurate and reliable at the time of publication. The information is general in nature and does not take into account your particular financial needs, circumstances and objectives.

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