Treasurer Josh Frydenberg unveiled the new stimulus budget on Tuesday night which aims to reduce tax, rebuild our economy and create more jobs. Those benefiting most from the budget are small businesses, young people, tradies and general taxpayers. We’re summarised what you need to know.
A win for business owners
Businesses who make up to $5 billion will be able to write off the full value of any eligible asset they buy up until 30 June 2022. Also, any losses made up to June 2022 can be offset against prior profits made in the last two years, to the 2018-19 financial year.
The tax cuts aim to create an extra 50,000 jobs, inject $200 billion in business investment through new equipment, and boost the economy by $12.5 billion over the next two years.
Incentives to hire young people
Businesses with a turnover of under $5 billion are encouraged to hire young workers. Businesses who employ eligible young people will receive $200 a week if aged 16 to 29 years, or $100 a week aged 30 to 35.
The employee must work at least 20 hours per week. This is thanks to the budget’s JobMaker Hiring Credit. It’s expected this will create 450,000 jobs for young people and will be available for businesses for up to a year.
That comes on top of the Government’s already announced $1 billion JobTrainer program to provide more affordable training places for school-leavers and $1.2 billion towards wage subsidies for 100,000 new apprenticeships and traineeships.
More jobs for tradies
The Government will commit an additional $1 billion to its guarantee of the National Housing Finance and Investment Corporation. This means more properties will be built. Also, $14 billion will be invested in road and rail infrastructure, creating 40,000 jobs across the country.
Boost in manufacturing
The Government will invest $1.3 billion towards the manufacturing sector. The aim is to create more jobs across the country and help Australia become more self-sufficient should we face another pandemic or disaster. The Government will focus on six industries — defence, space, medicine and medical products, food and beverages, resources technology and recycling and clean energy.
More money in the taxpayer’s pocket
Aussies will get a tax cut. The Government is bringing forward its second stage of tax cuts. It’s planning on back-dating the cuts to July this year. To make up for the four months that have already been, those refunds will be built into wages until the end of this financial year.
This means people who earn between $45,000 and $90,000 will end up with an extra $1,080. People earning more than $90,000 will take home up to $2,565 extra. The Low and Middle Income Tax Offset will be kept for an extra year.
More Medicare-funded psychological services
COVID-19 has certainly taken a big toll on our mental health. As a result, the Government has doubled the number of Medicare-funded psychological services from 10 to 20 sessions. Subsidised telehealth services (including mental health services) will be extended until the end of March 2021.
Investment into women in STEM and start-ups
The Government will provide $231 million over four years for the second Women’s Economic Security Package.
There will be increased grants for the Women’s Leadership and Development Program, and co-funded mentoring grants for women-founded start-ups.
There will be additional support for girls and women to gain STEM skills through programs like the Women in STEM Ambassador, the Women in STEM Entrepreneurship Grants Program, Girls in STEM Toolkit and a Women in STEM Industry Cadetship program.
A Respect@Work Council will also be established to address sexual harassment.
JobSeeker rate won’t be increased
The Government isn’t planning on increasing the base rate of the JobSeeker unemployment benefit. Unfortunately, the additional coronavirus supplement (currently $250 a fortnight), will end at the end of December.
For a full overview of the Budget and what it means for you, visit the Budget 2020-2021 website.