The government announced its 2020-21 budget on the 6th of October describing it as the, “most important budget since World War II”. This budget contains massive expenditure to reboot the economy from its downturn caused by the coronavirus pandemic. The Budget outlined $85 billion of stimulus over four years, allocated for immediate asset write-offs, income tax cuts and the extension of Job-Keeper.
The key budget measures include the following:
Personal Income Tax – The individual tax relief planned for 2021 has been brought forward and backdated to 1 July 2020. Taxable income thresholds have been increased to $45,000 and $120,000 for the 19 per cent tax rate and the 32.5 per cent, respectively. The low and middle-income tax offset will also remain active.
Loss Carry Back – Companies with turnovers of up to $5 billion can carry-back losses incurred up to June 2022. Applying this provision against previous years’ taxed profits will allow companies to obtain tax refunds.
Instant Asset Write-off – Businesses with turnovers up to $5 billion will be able to deduct the full cost of eligible capital assets acquired and first used or installed ready for use by June 30, 2022.
JobMaker – Companies employing staff aged between 16 to 35 years old are eligible to receive certain amount of credits called JobMaker Hiring Credits. The purpose of this incentive is to encourage organisations to take on additional employees.
Superannuation – The Government has announced that, from July 1, 2021 they will implement a proposal to ‘staple’ an existing superannuation account to an individual as they move between employments. The purpose of this measure is to reduce duplication of superannuation accounts for individuals.
Increasing the Small Business Entity Turnover Threshold – The Government will increase the small business entity (SBE) turnover threshold from $10 million to $50 million. The purpose of this measure is to allow larger entities to access a range of small business tax concessions.
Single National Business Registry – The Government has allocated a budget fund to accelerate its plans to create a single national business registry. This super registry will be operated by the Australian Taxation Office ATO.