The 2021 Federal Budget charts the path for Australia’s plans of further economic recovery as vaccines roll out throughout the country. Despite dealing with the COVID-19 pandemic, our economy seems to be in good shape. While it is assumed that international borders will remain closed until 2022, treasurer Josh Frydenberg’s announcement of the third Federal Budget aims to provide tax relief for millions of Australians and prioritise spending to boost certain industries, priming the economy for growth. Below are some of the key sectors to benefit from the 2021 Federal Budget announcement:
A total of $3.4 billion is going to be spent on vaccinating, testing and tracing the virus across the country.
Low- and middle-income earners
The Low and Middle Income Tax Offset (LMITO) is now extended, covering until the end of the 2021 – 2022 financial year. This sees up to $1,080 of tax cuts for singles and $2,160 for couples who are low- and middle-income earners.
Small and medium businesses
The temporary full expensing (instant asset-write off) has been extended for an additional year to support business investment. An immediate deduction for capital costs will benefit businesses and companies whose turnover and income are less than $5 billion. The government is also allowing COVID-19-induced losses to be written off to the 2022 – 2023 income year as the temporary loss carry-back scheme is extended another year.
Child care is being allocated a $1.7 billion budget to increase subsidy schemes up to 95% for families with more than 2 children, also removing the annual subsidy cap of $10,560 for high-income earners to take effect in July 2022.
Mothers, as well as part-time workers, benefit from the scrapping of the $450 threshold for paying compulsory super to help women increase their retirement incomes while working part-time.
In July 2021, single parents can buy a home at a 2% deposit, thanks to a new program that will support up to 10,000 single parents with children over 4 years old. For 10,000 first home buyers, the 5% deposit scheme continues as well as the government’s guarantee of up to 15% of the loan.
Meanwhile, aged care is also being given $17 billion to cover 80,000 new home care packages, 33,000 training places for nurses and $10 per day for each resident. For those aged over 60, downsizing their home to support their superannuation can go up to $300,000 when their property is sold.
Finally, a $164.5 million budget has been given to reduce family violence under the Australian National Plan for the next 3 years.
Besides families, men and women can also expect support from the government as budgets are set to provide $2.3 billion for mental health and suicide prevention.
The JobTrainer scheme is extended for another year with an allocation of $506 million. Meanwhile, $2.7 billion has been granted for new apprenticeships and trainees.
Medical and biotechnology
Australian-developed inventions and registered patents in the fields of medical and biotechnology will be taxed at 17% starting July 2022, halving the current corporate tax rate of 30%.
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