Tax cuts, business incentives and welfare payments are being used to cushion the impact of the COVID-19 pandemic and kickstart an economic recovery. It is estimated the measures will lead to a budget deficit of $213.7 billion with total debt peaking at $966 billion by 2024.
Treasurer Josh Frydenberg noted this budget is focused on “boosting consumer and business confidence, growing the economy and creating jobs.”
Tax cuts backdated to July 1 this year
Stage Two of the legislated tax cuts brought forward by two years
Lifting the 19% threshold from $37,000 to $45,000
Lifting the 32.5% threshold from $90,000 to $120,000
Resulting tax relief of up to $2745 for singles, and up to $5490 for dual income families compared with 2017-18.
Measures to encourage established businesses to spend on plant and equipment, research and development, and also hire or retain workers.
Instant Asset Write Off for businesses extended to businesses with a turnover of up to $5 billion and will be further extended until June 2022.
Relief for businesses “doing it tough” - enable earlier use of losses. Losses incurred to June 2022 can be offset against prior profits made in or after the 2018/19 financial year.
The government estimates that the combination of the immediate expensing of capital expenditure and loss carry-back measures will create an additional 50,000 jobs nationally.
New program called JobMaker, providing payments of $A200 per week, for one year, towards hiring people aged 16-35 who are currently on JobSeeker. Payments for those aged 30-35 is $A100 per week.
For R&D, the budget removes the cap on refunds and lifts the rate.
An additional $1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them.
Expansion of the government’s 10-year infrastructure pipeline, bringing it to $14 billion and supporting an estimated 40,000 new jobs.
Projects including major road upgrades in several states, rail projects in Victoria and WA, and new bridges in Tasmania and the ACT.
An additional $2 billion for road safety upgrades.
Frydenberg noted, “Funding will be provided on a use it or lose it basis. If a state drags its feet, another state will get the money. We need works to start, not stall.”
Aged pensioners will receive an additional $250 payment from December and a further $250 payment from March next year.
$1.6 billion package for senior Australians who wish to continue living in their own homes, adding 23,000 home care packages, bringing the total to 180,000 places.
The pandemic exposed Australia’s reliance on global supply chains. The budget includes a $1.3 billion Modern Manufacturing plan to target six key industries, from food and beverage manufacturing to renewable energy and the space industry.
$2 billion in concessional loans for farmers
$2 billion for water infrastructure projects
$350 million to support regional tourism, and $317 million for exporters to continue to access global supply chains.
The NDIS and mental health services
$3.9 billion for the National Disability Insurance Service
Doubling the number of Medicare psychological services funded through the Better Access Initiative from 10 to 20.
First home buyers
An additional 10,000 places for first home buyers of new homes under the First Home Loan Deposit Scheme.
$1 billion in low cost finance for the construction of affordable housing
$150 million in the Indigenous Home Ownership Program for new homes in regional areas.
Women in STEM
With a disproportionate number of women losing jobs during the pandemic, the Budget includes the second Women’s Economic Security Statement
$240 million in programs and support. These focus on new cadetships and apprenticeships for women in science, technology, engineering and mathematics, job creation and entrepreneurialism.
Long-term or older unemployed
The $550 fortnightly coronavirus supplement to JobSeeker payments that began in March, has been cut to $250 and is scheduled to end by December 31.
No mention of whether JobSeeker or supplements will be continued
No targeted programs for unemployed people older than 35.
Rules would get tighter on superannuation funds, which face the threat being banned from taking on new members if they repeatedly fail an annual performance test proposed by the government.
Despite record low interest rates crippling returns on term deposit, self-funded retirees – who do not get the aged pension – receive nothing in the budget.
There are no specific incentives or programs to encourage start-ups and new businesses.
Despite unveiling the new Women's Economic Security Statement in the budget, there isn't a lot to help women struggling amid the pandemic right now. Most programs assisting male-dominated industries like construction.
Other than continued assistance for providers impacted by the stage 4 restrictions in Victoria, there is nothing new for childcare providers in the Budget.