The 2021-22 Federal Budget is a balancing act between a better than anticipated deficit ($106 bn), an impending election, and the need to invest in the long term.
Key initiatives include:
- Personal Tax Rates – LMITO extended to for the current year (2020-21) and 2021-22 FY
- Immediate Asset Write Off – extended to 30 June 2023
- Company loss-carry back measures – extended to 2022-23 FY
- Individual Residency Tests – a new bright line test for 183 days or more
- First Home Owners – schemes for single parents, loans, and savers
- Child care subsidy – increases for family income and multiple children
It is also a human budget (cynics might say voter focused), with $17.7 billion dedicated to aged care, more money in the pockets of low income earners, the COVID vaccine rollout, $2 billion for mental health, a women’s economic package including a child care subsidy increase and funding to prevent violence, and a Royal Commission into defence and veteran suicide.
There will also be a lot of money flowing through to the private sector to those that are capable of developing new technologies. Momentum and drive to develop new initiatives is a strong theme and in some circumstances the Government will offset the risk of those initiatives – if you are in the right sectors.
The $1.2 billion digital economy strategy seeks to rewrite Australia’s underlying infrastructure and incentivise business to boldly develop towards a digital future. The program is broad – from upskilling the workforce, the expansion of consumer digital rights, the development of SME digitisation, Government service delivery, to cybersecurity.
Beyond digital, co-funding and seed capital is available to those developing new technologies that reduce emissions, and grow new export markets and jobs in this sector.
Productivity is a key take-out with several measures targeted at encouraging industry to innovate and develop including the extension of full expensing and the loss carry back measures.
If you’re looking for more in depth information, on this page you’ll find links to download our Federal Budget Summary and you can view a recording of our Federal Budget Webinar.
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