Australia’s Federal Government handed down the most important budget in more than 60 years, with the government focusing on job creation and job cuts.
Australia’s Treasurer Josh Frydenberg said “Australians have been tested like never before” in 2020 before delivering the budget.
“Flood, drought, fires, and a global pandemic. So many Australians, through no fault of their own, are doing it tough,” he said.
“Lives have been lost. Businesses have closed. Jobs have gone. Our cherished way of life has been put on hold.”
With the deficit ballooning to more than $213 billion, the biggest since World War II, Treasurer Josh Frydenberg unveiled a stimulus budget which hopes to slash taxes and decrease unemployment which has grown due to COVID-19.
Tax cuts and pension funds have been included in the budget, whereas massive incentives have also been offered to businesses.
More than 11 million taxpayers will get a tax cut backdated to 1 July, giving lower and middle-income earners tax relief this financial year of up to $2,745. Dual income families will receive relief of up to $5,490, compared to their tax in 2017-18.
The economy
$213.7b
The total deficit for 2020/21 with the forecast to still be $66.9b by 2023-24 financial year. Net debt will be 36 per cent of GDP this year, peaking at 44 per cent of GDP in June 2024. The government will raise the debt ceiling to $1.1 trillion.
Jobs and workers
JobKeeper is $101 bn and JobSeeker is $100bn, predictions show spending on dole payments will soar to $41 billion in 2020/21 but almost halve to $22 bn a year later.
New superannuation accounts will no longer be created each time a worker starts a new job – instead the person’s super account will follow them to their next workplace.
JobKeeper will end on 28 March, 2021 but a “back-to-work” wage subsidy scheme for businesses employing Australians under 35 who have been forced onto welfare payments will be created.
There will be no change to the JobSeeker rate.
The JobTrainer fund, which will create up to 340,000 training places.
Taxes
Low and middle-income earners get $2745 in tax relief, while households will get up to $5490. The 19 per cent tax rate threshold will be increased from $37,000 to $45,000. The 32.5 per cent tax threshold will be increased from $90,000 to $120,000. Granny flats have a capital-gains tax exemption provided a written agreement is in place.
Some $17.8 billion is being spent on reducing the tax bill for ordinary Australians, especially those who earn under $120,000.
The fringe benefits tax that applied to businesses retraining workers has been scrapped.
Tax fraud will be combatted by the Australian Tax Office with an additional $15.1m to target crime in the tax and superannuation systems.
Education
A $1.2b-package will be handed to Australian businesses to employ 100,000 new apprentices and trainees, and $326m provided for 12,000 new domestic university placements. Universities will be offered $550m to provide 50,000 new higher education short courses in agriculture, health, IT, science and teaching.
The Smith Family charity will receive $38m to help Australia’s poorest students finish high school.
Environment
The water and recycling industry get a $249m boost to stop 600,000 tonnes of waste ending up in landfilles and also helping to create a further 10,000 jobs. Another $103m for a National Radioactive Waste Management Facility at Napandee, near Kimba, South Australia. Farmers and communities still struggling with the effects of the drought will be supported by $155.6m over four years.
There will be $233m for Uluru, Kakadu, Christmas Island and Booderee National Parks, while $47.4m has been benchmarked for ocean health initiatives over four years.
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Health and Welfare
The government has benchmarked $2.6b for five million pensioners and the unemployed who will pocket $500 in bonus payments ($250 in December and $250 in March).
Thousands of new mums will qualify for paid parental leave even if they’ve been stood down during the pandemic, however they must be in paid work to qualify.
No new childcare initiatives but record spending of $9bn next financial year and funding for 23,000 new home care packages for older Australians.
Health
Elderly Australians with a disability who can’t get access to the NDIS will get help from a new $125 million program.
Aged care homes will get $750 million to help them manage COVID including workforce retention bonuses, infection control and training for nurses. There will be $7.6 million for parents experiencing stillbirths or death of a child under 12 months.
The budget offers $60 million for DV “safe places” initiative.
There has been $9 million for research into cancer in children and young adults. Adult children will be allowed to stay on their parents’ private health fund accounts until the age of 31.
Medicare funded mental health consults will double from 10 to 20
Tourism
A $250-million program has been earmarked to encourage regional tourism
$233.4 million over three years from 2021 to improve infrastructure in Commonwealth national parks. Hopes to improve tourism draw of these “internationally iconic places”.
$6 million over two years from 2020-21 to support local tourism operators and encourage tourism to the Great Barrier Reef.
Infrastructure
There has been $10b allocated in infrastructure spending, including $7.5 billion in road and rail projects spread across all states and territories. Manufacturing in six target areas will get a $1.5 billion boost. These areas are space, medicine, food and beverage, defence, resources tech, recycling and clean energy.
Australia’s domestic fuel security will benefit from $211m in funding while another $53m set aside for gas infrastructure.
$800 million aimed at helping businesses work online, including $29.2m to boost early business access to the 5G network.
An additional 10,000 places have been created in the First Home Loan Deposit Scheme.
$419.9m has been allocated for upgrade of government’s business register, and the ATO will offer simplified GST accounting methods for businesses with turnovers under $50m.
$1.9 billion new funding in energy plan to support low emissions and renewable technologies, to lower emissions and address climate change.
Many businesses will no longer have to pay fringe benefits tax. Companies with turnovers of between $10m and $50m will be able to access up to 10 small business tax concessions.
Technology
An NBN upgrade, worth $4.5b, will replace copper lines and older hardware. The upgrade, which will unlock download speeds of up to one gigabit per second for millions more fixed-line users, will take place over the next three years.
High-speed 5G technology, which could compete with the NBN, also received a boost, with the government committing $29.3m for 5G trials in industries including agriculture and manufacturing. The government is being given $1.67b for the government’s cyber security strategy.
There is $260m allocated for the digital identity system for businesses.
The government will pay compensation of around $3b to Australians and citizens of other countries “for damage caused” by our national space program.
Defence
$101.7m allocated over four years for veterans’ mental health support and services.
Infrastructure programs for Pacific allies have been funded to the tune of $124m over 10 years. Among other projects, Australian will construct a border and patrol boat “outpost” on the Solomon Islands.
Regional Australia
Farmers will be able to access $50m in rebates for bores and dams, and $100m has been allocated for the Regional Recovery Partnerships program.