We know the handing down of the budget isn’t exactly riveting television viewing and let’s face it … who’s going to read the entire document?
Thankfully, Tropic’s friend in the local tax and financial sector, Grant Thornton, has done all the hard work to give us an easy-to-digest snapshot of what the nation’s financial plan means for us.
The big one is the extension of the low and middle income tax offset, initially introduced last year. It’s expected to benefit more than 10-million people, including 69,600 in the Leichhardt electorate. Those eligible will receive up to $1080 for individuals and $2160 for dual income couples when tax returns are filed. It comes at a cost of $7.8-billion to the budget.
There are a few superannuation initiatives, the most significant being the removal of the minimum contribution threshold. Currently, employers don’t need to pay superannuation for employees who earn less than $450 per month. The change means part-time and casual employees will now receive super. About 300,000 employees will benefit, 63% of them women. However, it’s not going to be immediate. The legislation won’t be introduced until at least July next year and won’t come into effect until the start of the financial year after it’s passed through Parliament.
For older Australians, the work test has been scrapped. Currently you have to work 40 hours within 30 days to make voluntary contributions to your super, which limits those who were part of the workforce before compulsory super was inbtroduced. The change means people aged between 67 and 74 who may have already retired, who volunteer or who have more flexible work arrangements can continue to make voluntary contributions or salary sacrifice.
The First Home Super Saver Scheme will also be increased. It’s gone from$30,000 per person to $50,000. The money comes from allowing first home buyers to raid their own contributions to their super fund. The Family Home Guarantee has also been extended, allowing eligible single parents to buy a home with as little as a 2 per cent deposit. It will offer 10,000 places over four years.
Young families will also benefit from an increase in childcare subsidies. From July next year, the rebates offered the in policy will increase for a second or subsequent child in care. So, if a first child in care is eligible for a 65 per cent subsidy and a second child also enters care, the second child will be eligible for a 95 per cent subsidy. Caps for wealthier families will also be removed. Currently, childcare subsidies are capped at $10,560 for households that have an income of more than 189,390. Combined, the changes will cost taxpayers $1.7-billion.
The key budget measure for business is a one-year extension of the instant asset write-off scheme. It allows businesses with a turnover for less than $5-billion to immediately write off the cost of new assets, rather than claim deductions over several years through depreciation. Eligible assets must be first used or installed by June 30, 2023. 9,400 businesses in Leichhardt can access this scheme.
“The extension of time for both the low and middle income tax offset and the instant tax write-off will be happily received by taxpayers in the region. In particular, the instant write-off will lead to more capital purchases over the next two years, providing both tax relief for the purchaser while bolstering the sales of local suppliers of that equipment.”
Joe Mendiolea, Grant Thornton Cairns Office Chair
The Apprentice Wage Subsidy Scheme has also been extended, under which the government will pay half the wage given to an apprentice or trainee, up to a cap of $7,000 a quarter. 270,000 new apprentices and trainees are expected to be hired under the scheme by March next year, costing taxpayers $2.7 billion over four years. The Government is also doubling its commitment to the JobTrainer Fund to support a further 163,000 new training places to upskill job seekers and meet skills shortages.
Tax cuts for small and medium enterprises (with 200 or fewer employees) are also included. The corporate tax rate will drop from 27.5% to 25% from 1 July 2021.
A $1.2 billion rescue package for the tourism and aviation industry has also been announced, aimed at encouraging domestic tourism as well as offering direct payments to airlines and travel agents.
The $10 billion reinsurance pool announced last week to subsidise high premium costs in North Queensland is included in the budget.
There’s not really a lot in terms of infrastructure spending, however there are pools of funds that can be accessed for projects such as social housing. The big ticket item for the region is duplication of the traffic-congested Western Arterial Road. The State Government will need to contribute $60 for the project to begin.
$19.3 million has also been set aside for stage one of the Daintree microgrid, which will replace high-cost diesel generation the community currently relies on through harnessing hydrogen.