2021 Federal Budget: What it means for you
Coming off one of the most expensive policy years in the country’s history, the government unveiled its 2021-22 Federal Budget today, detailing its spending plans for health, infrastructure, housing and more.
The “pandemic budget,” as it’s been called by Treasurer Josh Frydenberg, hopes to give Australia’s economic recovery efforts a shot in the arm, boost productivity, and finally bring unemployment below 5 per cent.
There's already plenty of debate about whether it will be sufficient, but there’s no denying the measures outlined today are ambitious. Below, we run through some of the main areas the government will be focusing on.
The low and middle-income tax offset, which was supposed to end 30 June 2021, will remain in place for another year. That means workers can expect another rebate after completing their tax return this year.
|Taxable income||Amount offset|
|$37,000 or less||$255|
|$37,001 - $48,000||$255 plus 7.5 cents for every dollar above $37,000, up to $1,080|
|$48,001 - $90,000||$1,080|
|$90,001 - $126,000||$1,080 minus 3 cents for every dollar of the amount above $90,000|
The government plans to spend an additional $10 billion on infrastructure projects over the next ten years, including road works in Tasmania, South Australia, and the Northern Territory, and rail and freight upgrades in Queensland and Western Australia.
It will also earmark $2 billion in funding for an intermodal terminal in Melbourne, and $2 billion to upgrade the Great Western Highway between Katoomba and Lithgow NSW’s Blue Mountains.
Runaway property prices have raised another round of affordability concerns, so the government has given the green light to a few programs it hopes will make things easier for those hoping to buy.
That includes the Family Home Guarantee, which will give 10,000 single parents the chance to purchase an existing home or build a new one with a deposit of just 2 per cent. It is due to commence 1 July 2021 and will run for four years.
Another 10,000 spots will be made available under the First Home Loan Deposit Scheme, which helps new buyers break into the property market by guaranteeing up to 15 per cent of the loan.
The First Home Super Saver Scheme will also be amended to let first home buyers access up to $50,000 of voluntary super contributions to fund their property purchase. Previously, home buyers could only withdraw $30,000.
$1.7 billion will go towards helping low and middle income families access childcare, which the government hopes will hasten new parents’ return to the workforce.
From mid-2022, the current childcare subsidy will be increased to 95 per cent for families with at least two children. According to the government, the measure could save a quarter of a million families as much as $2,260 per year.
The current $10,560 cap on the childcare subsidy for higher income families will also be removed, allowing households with a combined income of more than $189,390 to access the full range of benefits.
“By reducing disincentives to work, the investment will add up to 300,000 hours of work per week, which is the equivalent of around 40,000 women working an extra day per week,” the government said.
After a series of misconduct scandals, the Coalition government will be hoping to restore some goodwill among female voters with a $354 million funding boost for women's health programs. The funding will be spread out over four years, and will include:
- $95.9 million for embryo screening during the IVF process
- $47.4 million for perinatal mental health services for new and expectant mothers
- $26.9 million to help those with eating disorders
- $16.6 million to support the National Women’s Health Strategy across maternal, sexual and reproductive health
This budget will also allocate a further $1.1 billion to women’s safety measures, including preventing violence, delivering frontline and response services, financially supporting women leaving violent relationships, and expanding justice system responses.
The government will pour $17.7 billion into aged care in what it has described as a “once-in-a-generation investment.” The funding boost will address many of the recommendations of the royal commission into aged care, which pulled no punches in describing the problems plaguing the sector in its final report last year.
In response to the devastating bushfires and floods which have occurred in recent years, $600 million will go towards creating a national agency dedicated to providing relief to disaster-stricken communities.
The National Recovery and Resilience Agency will focus on strengthening regional Australia’s defences against bushfires and cyclones, improving telecommunications infrastructure, and building levees in disaster-prone areas.
The government hopes to fuel business investment by extending its full expensing scheme. Under the scheme, businesses with a turnover or income under $5 billion will be able to immediately write-off the cost of assets that are first used or installed by 30 June 2023.
Australia’s video game industry will also benefit, with a 30 per cent refundable tax offset, capped at $20 million per year, available to eligible digital game developers.
Meanwhile, small brewers and distillers will receive a support package aimed at reducing their tax burden. Starting July this year, business owners in the industry will be able to claim a full refund on any excise they pay up to an annual cap of $350,000. Treasury estimates this will result in savings of about $55,000 each year.