With the 2020 Federal Budget released yesterday, we've put together a quick breakdown on everything you need to know about this year's budget.
Income Tax - Fast tracking Tax cuts
- The tax cut initiative has been brought forward by two years to July 1 of this year and will affect up to 11 million Australians.
- Boost for workers on lower incomes: There has been an extension of the low and middle income tax offset for a further 12 months until 30 June 2021.
- Raised tax threshold backdated to July 2020: The government will lift the upper threshold of the 19% tax bracket from $37,000 to $45,000 and will also lift the upper threshold of the 32.5% tax bracket from $90,000 to $120,000.
Businesses– all but the top 1% – to receive asset write-offs and tax offsets
- Businesses with a turnover of up to $5bn will be able to deduct the full value of any eligible capital assets purchased after budget night and first used or installed by 30 June 2022. The measure expands the instant asset write-off, previously only available to small and medium businesses and will reach up to 99% of businesses in Australia.
- Businesses will also now be able to offset losses incurred before June 2022 against profits from 2018-19 and later.
Jobs - Creating more opportunity and stimulus for companies to help create more jobs
- The government announced a new initiative called “JobMaker” which will encourage businesses to take on more younger employees by providing a credit of up to $200 per week for a year to employees under 30 and $100 per week for a year for employees aged 30 to 35. Hires made under this scheme will need to be employed for at least 20 hours per week to be eligible.
First Home Buyers - Getting into the property market for the first time
- The First Home Loan Deposit Scheme has been extended with properties valued up to $950,000 in Sydney, $850,000 in Melbourne and $650,000 in Brisbane now covered under the scheme.
- This also means that first home buyers with a 5% deposit won’t have to pay Lender’s Mortgage Insurance either.
Health - Responding to the pandemic
- Medicare funded psychological services have been doubled from 10 visits to 20 visits.
- There has been 1.6 billion allocated towards 23,000 more home care packages.
- Telehealth has received more funding with $112 million allocated towards the program.
- $1.7 billion has been allocated for buying the COVID-19 vaccine with $24.7 also allocated for syringes to administer the vaccine.
- $1.1 billion has also been allocated towards hospitals in states and territories as part of the COVID-19 response plan.
- $750 million has also been allocated for COVID-19 testing as a response to the pandemic.
Education - Funding research and training
- There has been $1 billion allocated to extra research funding for universities.
- The government has also allocated an extra $300 towards undergraduate places as well.
Infrastructure - 7.5 billion investment
- $7.5 billion for transport infrastructure around the country, this includes: $2.7 billion in NSW, $1.3 billion in QLD, $1.1 billion in VIC, $1.1 billion in WA, $625 million in SA, $360 million in TAS, $190 million in NT, and $155 million in ACT.
- Funding for “shovel-ready projects” including $2 billion for road safety initiatives and $1 billion for the Local Roads and Community Infrastructure Program.
- $2 billion will be allocated to improving water infrastructure in regional communities as well.
Pensioners - will receive two $250 payments
- If you’re an aged pensioner, carer, disability support or concession card holder you’ll receive two cash payments of $250 - one on the 30th November 2020 and one in early 2021.
If you’d like to read more about the 2020 Federal budget in greater detail you can also check it out here.
Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.