The 2020-2021 budget was delivered on 6th October 2020, having been deferred from its original date of 12th May 2020 due to the COVID-19 pandemic. The budget is firmly focused on supporting Australia’s recovery from the first recession since 1991 and worst economic performance since 1959.
The overarching goal of the budget is to create jobs, increase economic resilience and create a more competitive and income generating economy.
A more detailed outline of the announcements can be provided to anybody that would like one (please ask via return email), however in summary:
PERSONAL TAX CUTS
Personal income tax cuts due to start on 1st July 2022 have been brought forward and will now retrospectively apply from 1st July 2020
Further tax cuts are legislated for 1st July 2024
From 1 July 2021 your superannuation account will move jobs with you meaning no more multiple (unintended) superannuation accounts and making management easier
Annual performance tests for MySuper accounts by 1st July 2021 where underperformance will be reported
No change to the early release scheme for this half year with one withdrawal opportunity of up to $10,000 and the cut off being 31st December 2020, and
Contrary to expectations, there were no changes to super guarantee (SG) arrangements
Two payments of $250 will be made to eligible Australians who receive the age pension, carer payment, disability support pensions, family tax benefit and health care cardholders
Payments are not counted for the income test, are tax exempt and will be made automatically (i.e. you do not need to take any action)
Payments are scheduled to occur in November 2020, and early 2021
The government will provide an additional 23,000 home care packages over four years (starting 2020/2021), allowing more Australian’s to stay in their homes
Additional funding for short term support providing support for senior Australians who are frail or who have self-isolated due to COVID-19 risks, and
A capital gains tax exemption in relation to elderly Australians (or those with a disability) who reside in granny flat arrangements
BENEFITS FOR BUSINESSES
There were several proposed changes for businesses including the full expensing of capital assets (for assets acquired, used and / or installed by 30 June 2022) and the carry back of tax losses. There were also announcements around the wage subsidy for new employees and the Job Maker hiring credit, both designed to encourage the creation of new jobs. Please speak to your business adviser / accountant for further information on these measures.
Note that is important to remember that the budget night announcements are only statements of intended change and are not yet law.
Information contained on this web page is of a general nature only and your personal financial position, objectives or needs have not been considered. Please ensure you have the necessary financial, tax and legal advice before acting on this information. Do not rely upon it when making financial decisions.