The 2021 Australian Federal Budget Explained

WeMoney
Last night, Tuesday the 11th of May 2021, Treasurer Josh Frydenberg took to the stage to hand down the 2021 Australian Federal Budget. It's no secret that Australia's economy was hit hard as a result of Covid-19 so with that in mind Frydenberg announced that this budgets theme is 'recovery.' If we were to label it, we'd think the theme was 'spend, spend, spend' as it seems the treasurer has taken a leaf out of our favourite daytime televisions hosts book, and is dishing out money like the beloved Oprah. The good news is, there are a lot of 'winners' to come out of this budget and fewer 'losers' than anticipated. Let's take a look at the breakdown.

Winners

First Home Buyers

For any Australians looking to enter the property market for the first time, the budget will provide assistance to get there sooner.

The First Home Loan Deposit Scheme has been extended to include another 10,000 places, assisting more first home buyers to enter the housing market with a less than 20% deposit. Under the scheme the government acts as guarantor for first home buyers, enabling them to purchase or build a new home with a deposit as little as 5% without needing to pay Lenders Mortgage Insurance (LMI).

The First Home Super Saver Scheme has also had a makeover, with first home buyers able to withdraw up to $50,000 of voluntary contributions from their superannuation, a rise from the previous threshold of $30,000.

A new Family Home Guarantee Scheme has also been announced, to assist single parents with dependent children to buy a home with a deposit as little as 2%.

Low & Middle Income Tax Payers

Australians earning less than $126,000 per annum will receive the Low and Middle Income Tax Offset. Aussies will receive up to $1080 back in tax at the end of the next financial year and the amount refunded will vary depending on how much you earn.

Mental Health

$2.3 billion invested into the National Mental Health & Suicide Prevention plan across the following areas; early intervention, suicide prevention, treatment, supporting vulnerable Australians and increasing the workforce.

Child Care

$1.7 billion has been committed to the Child Care industry over the next three years. This will be split into approximately $566 million each year that will go towards that Childcare Subsidy scheme that is due to come into effect as of July 2022. It is anticipated that this will assist approximately 250,000 families by making child care more affordable.

Vaccines

An extra $1.6 billion will be spent on vaccine strategy over the next 5 years. An additional $1.5 billion will be put towards Covid-19 related health services including contract tracing and testing.

Women

A $345 million health package has been outline for women and girls. This includes over $47 million towards depression services for expecting mothers and new mothers, as well as $100 million to improve cervical and breast cancer screening programs.

In addition to this, the budget also puts $998 million towards reducing domestic and family violence as well as supporting survivors for the next four years.

$42.4 million has been committed to offer 230 scholarships in the STEM (Science, Technology, Engineering & Mathematics) industries.

Small Brewers

Micro brewers and small distilleries will be given up leg up this year with 1000 of them being offered $255 million in tax relief. This tax refund excludes large alcohol businesses.

Losers

International Tourism

Covid-19 and the subsequent border lockdowns have greatly impacted Australian tourism operators. With international borders not expected to open until at least mid 2022, the future is looking grim for tourism operators that rely heavily on international visitors.

Universities

No specific funding was announced for Universities in the budget. This is bad news as many Universities rely on International Students to stay afloat.

For more information pertaining to the budget or to read the budget papers visit budget.gov.au.

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.

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