On 6 October 2020, Treasurer Josh Frydenberg delivered his second Budget, with the Coalition looking to jobs, tax cuts and business stimulus as a way out the recession, after the coronavirus pandemic erased the Government's 2019 promises of a surplus.

09 October 2020

Tax Cuts

The Federal Budget contains income tax cuts for most Australians, with someone on the average wage set to around receive an extra $20 each week as soon as the cuts are passed.

Treasurer Josh Frydenberg says that, with the in-principle support of Labor, the Australian Tax Office (ATO) can begin changing the Pay As You Go rates that determine how much tax your employer withholds each time you get paid.

The government will bring forward stage 2 of its legislated tax cuts, that will see the 19 per cent threshold rise from $37,000 to $45,000, and the 32.5 per cent threshold go from $90,000 to $120,000.

It means those earning $50,000 a year will get $1080 back and those on $90,000 a year will get $1,215 back. Those on more than $120,000 will get $2,565 back.

The tax cuts are backdated to July of this year, however employees will not get to access the benefits they would have received between July and now until the end of the 2020-21 financial year when they lodge their income tax return.

The Low and Middle Income Tax Offset will also stay for an extra year, meaning eligible individuals will get $1,080 and dual income couples will get $2,160. When the offset is combined with the tax cuts, singles could get back up to $2,745 and dual-income families could get back up to $5,490.

Economy

  • Total deficit of $213.7 billion for 2020/21

  • Deficit forecast to reduce to be $66.9 billion by 2023-24 financial year

  • Net debt to be 36 per cent of GDP this year, peaking at 44% of GDP in June 2024.

  • Government to raise the debt ceiling to $1.1 trillion.

Business and manufacturing

  • $1.5 billion for manufacturing, targeting space, medicine, food/beverage, defence, resources tech, recycling/clean energy

  • Full asset write-off on purchases for 99% of businesses until 30 June 2022

  • Losses to June 2022 to be offset against prior year profits

  • $800 million to help businesses work online

  • $29.2 million for 5G access

Education

  • $1.2 billion for businesses to employ 100,000 apprentices and trainees

  • $326 million for 12,000 new domestic university placements

  • $550 million for universities to provide 50,000 new higher education short courses in agriculture, health, IT, science and teaching

Environment

  • $249 million boost for waste and recycling industry

  • $10 million for a National Radioactive Waste Management Facility at Napandee, SA

  • $155.6 million over four years for farmers and communities hit by drought

  • $233 million for Uluru, Kakadu, Christmas Island and Booderee National Parks

  • $47.4 million over four years for ocean health 

Health and Welfare

  • $500 bonus ($250 in December, $250 in March) for pensioners and unemployed

  • Paid parental leave for new mums even when stood down in pandemic

  • Funding for 23,000 home care packages for elderly

  • $750 million for aged care homes to manage COVID

  • $60 million for DV “safe places"

  • $9 million for child/young adult cancer research

Jobs and Welfare

  • Dole payments to hit $41 billion in 2020/21 but fall to $22 billion a year later

  • Super accounts to automatically follow workers from job to job

  • JobKeeper to end 28 March 2021. New “back-to-work” wage subsidy scheme for businesses employing under 35s who have been on welfare payments

  • No change to JobSeeker rate

Infrastructure

  • A total of $10 billion allocated to infrastructure spending

  • $7.5 billion in road and rail projects spread across all states and territories

  • $53 million for gas infrastructure

  • $211 million provided for Australia’s domestic fuel security.

Technology

  • $4.5 billion NBN upgrade will replace copper lines and older hardware

  • $29.3 million for 5G trials in industries including agriculture and manufacturing

  • $1.67 billion for cyber security

  • $260 million for digital identity system for businesses

  • $3 billion compo scheme “for damage caused” by our national space program.

Defence

  • $101.7 million allocated over four years for veterans’ mental health support and services.

  • Infrastructure programs for Pacific allies have been funded to the tune of $124 million over 10 years. Among other projects, Australia will construct a border and patrol boat “outpost” on the Solomon Islands

Regional Australia

  • $100 million allocated for the Regional Recovery Partnerships program

  • $30 million ­Regional Connectivity Program

  • $200 million for the Building Better Regions Fund

  • Farmers will be able to access $50 million in rebates for putting in bores and dams