On Tuesday night Federal Treasurer Josh Frydenberg handed down the Budget 2021-22, which aims to build on the economic recovery of late 2020.
We have highlighted the key initiatives below and prepared a Federal Budget 2021-22 Guide which provides a comprehensive overview of the detail.
Key Budget Initiatives:
- Extension of temporary full expensing and loss-carry back providing immediate deductions for business investment in capital assets
- Introduction of a ‘patent box’ offering tax concessions on income derived from medical and biotech patents
- Tax and investment incentives for the digital economy
- Extension of the low and middle-income tax offset
- Child care subsidy increase for families with multiple children
- $17.7 billion over 5 years to reform aged care
- $2.3 billion on mental health infrastructure and programs
- New and extended homeownership programs for first homeowners and single parents
Australia has managed the COVID-19 pandemic well, but good management isn’t enough to protect us from the $213.7 billion deficit in 2020-21. The Government has taken to heart the old adage, “You have to spend money to make money” to trade our way out of a black hole.
Outside of the big-ticket tax measures, what is striking about this Budget is the sheer volume of initiatives it funds – too many to itemise in this update. Many of the initiatives aim to improve how Government interacts with the community and business in particular.
The final comments in the Treasurer’s Budget speech paint a cautionary tale. The focus right now is on the path to growth and stabilising debt in an effort to boost consumer and business confidence. However, once “recovery has taken hold and the unemployment rate is on a clear path back to pre-crisis levels” of below 6%, the second phase will kick in – the deliberate shift from providing temporary and targeted support to stabilising debt.
Get the right advice
To discuss the Federal Budget and its potential impact on your individual circumstances or business call PPT’s friendly team on 5331 3711 (Ballarat) or 8391 3063 (Melbourne).
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.