The 2020/21 Budget was handed down this week and it offers good news all round with sweeteners for SMEs, 90 per cent of Australian taxpayers, those looking to retire, those suffering from mental health conditions and aged people in the community. These promises will have to pass legislation, but reception from the business community has been positive. However, a falling property market on the East Coast and unstable global economic conditions may jeopardise this Budget.
Key points:
‘Back in the Black’ is what it’s being called, but the margins are slim. The Budget announced a $4.2 billion deficit this year, but next year the government aims to be in surplus by $7.1 billion.
Forecast growth of 2.25 per cent this year rising to 2.75 per cent in 2019-20 and 2020-21. Lower than originally forecast.
Tax cuts
The tax offset amount for low to middle-income earners will double.
All taxpayers earning between $45,000 and $200,000 could have their tax rate reduced from 32.5 per cent to 30 per cent. This will benefit more than 90 per cent of taxpayers. But you’ll have to wait till 2024 for this policy to kick in.
SME sweeteners
Medium-sized businesses with a turnover of up to $50 million will be able to instantly write off assets.
In addition, the threshold for these assets has been increased from $25,000 to $30,000.
Superannuation
In an effort to boost retirement savings in a population that is working for longer than ever before, those aged 65 and 66 will be able to make voluntary contributions to their super without meeting the work test.
There are also allowances for three years’ voluntary non-concessional contributions, capped at $100,000 a year.
Infrastructure
$100 billion boost to infrastructure spending, but mostly in NSW, Victoria and Queensland.
Health
Boost to mental health services spending and $282.4 million to fund additional home care packages for aged people.
Energy bill help for pensioners/carers/newstart
$285 million to help pensioners with power bills. This has been extended to Newstart recipients also. It is a one-off payment, worth $75 for singles and $125 for couples