Federal Budget 2021: Five-minute guide to Morrison Government’s ‘pandemic’ budget
Securing Australia’s economic recovery is at the heart of the Morrison Government’s second pandemic Budget, which will pump billions of dollars into infrastructure and skills, aged care and mental health.
With the initial shock of the coronavirus crisis over and the economy having recovered faster than expected, Treasurer Josh Frydenberg has turned his attention to creating jobs to drive the unemployment rate below 5 per cent, from the current rate of 5.6 per cent.
But with the Budget assuming international travel will remain off the cards until mid-2022 and COVID-19 outbreaks still triggering snap lockdowns, Australia is not out of the woods yet.
It is expected to be the last Budget before next year’s Federal election.
20-21: $161b deficit ($52.7b improvement from October 6 budget)
21-22: $106.6b deficit
Aged care will form the centrepiece of the Budget. A whopping $17.7b will be spent over the next four years to improve the sector, as the Government responds to the damning findings of aged care royal commission.
A $110b infrastructure pipeline will fuel the economic recovery post-COVID. WA will get $1.3b in new money for road and rail projects. The funding will support 4000 direct and indirect jobs across the State.
The beleaguered vaccine roll-out will get a shot in the arm with an extra $1.9b funding. It includes money for administering vaccines, managing distribution and logistics, and recording and monitoring data. Over 2.5 million vaccine doses have already been administered.
Australians with a disability will be better supported, with an extra $13.2b over four years to fund the NDIS. More than 100,000 people joined the scheme in the last year.
An extra $2.3b has been committed to mental health and suicide prevention in the aftermath of COVID. It includes money for more Headspace centres and extra funding for the treatment of eating disorders. The package will also fund a new National Suicide Prevention Office.
$2b has been allocated to fund pre-schools over four years, with reforms to improve early childhood learning participation. It will support access for all children to at least 15 hours a week of quality learning in the year before school.
Meanwhile, universities will receive more than $19b in 2021-22.
To encourage greater female participation in the workforce, $1.7b in childcare subsidies will be provided to help fund childcare fees for parents with more than one child.
Up to 10,000 single parents will be able to buy their first home with a deposit of just 2 per cent, with the Federal Government going guarantor on loans to help them crack the heated property market. Of the 125,000 eligible single parents, about 85 per cent are women.
A further $1.1b will be invested in women’s safety in a pink-hued Budget, which comes in the wake of controversies around sexual harassment and assault in Canberra. It includes $164.8 million over three years for initiatives like “escaping violence payments”.
The Government will extend the low and middle-income tax offsets for another 12 months beyond its June 30 end date. The LMITO, which provides a rebate of up to $1080 for singles and $2160 for dual-income couples, affects about 10 million people who earn up to $90,000 a year.
The Pension Loan Scheme will be improved, with the Government providing immediate access to lump sums of around $12,000 for singles and $18,000 for couples. The Government will also drop the age to 60, down from 65, for downsizers seeking to turbocharge their nest eggs by putting home sale money into their superannuation.
The current $450 a month super threshold, where workers must earn at least that much a month from a single employer before super is paid, will be abolished. The Government expects this will improve economic security in retirement for around 200,000 women, who are more likely to hold part-time jobs.
TOURISM AND AVIATION
The embattled tourism and aviation sectors will be lifted by a $1.2b targeted support package designed to maintain essential air services, provide 800,000 half-price flights to regional tourist destinations, and protect jobs. It builds on over $2.7b already provided in direct aviation support during the pandemic.
CLIMATE AND ENERGY
The Government has allocated $275.5m to create four new hydrogen hubs in regional Australia and another $263.7m to develop carbon capture and storage projects. At least one hydrogen hub is expected to be located in WA, in the Pilbara.
It will also provide funding to the tune of $600m to create the National Recovery and Resilience Agency to finance resilience projects in preparation for natural disasters.
The Government will launch a new “patent box” starting on July 1 next year to stimulate innovation. It will tax income derived from Australian patents in the medical and biotechnology sectors at a concessional 17 per cent tax rate – almost half the rate that applies to large companies.
The instant asset write-off, which allows eligible businesses to immediately write off the full value of any assets they purchase, was due to expire this year but will be extended until June 2023.
Small brewers and distillers will be given a $225m tax break that will lift the excise refund cap from $100,000 to $350,000 a year.
The digital sector will receive $1.2b set aside for digital services. This includes tax breaks for businesses and a $500m on government services. It also features a video games offset of 30 per cent to support Australia taking a greater share of the $250b global game development market.
A $371 biosecurity package will help protect the agricultural sector.
The JobTrainer fund will be expanded with a $500m investment, subject to matched funding by state and territory governments. The extension of the scheme until December 2022 will deliver a further 163,000 places.
An extra $747m will be provided to upgrade four key military bases in the Northern Territory.
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