Budget 2021-22: The Balancing Act Budget
The 2021-22 Federal Budget is a balancing act between a better than anticipated deficit ($106 bn), an impending election, and the need to invest in the long term.
It is also a human budget (cynics would say voter focussed), with $17.7 billion dedicated to aged care, more money in the pockets of low-income earners, the COVID vaccine rollout, $2 billion for mental health, a women’s economic package including a child-care subsidy increase and funding to prevent violence, and a Royal Commission into defence and veteran suicide.
Key initiatives include:
- Extension of temporary full expensing and loss-carry back providing immediate deductions for business investment in capital assets
- Introduction of a ‘patent box’ offering tax concessions on income derived from medical and biotech patents
- Tax and investment incentives for the digital economy
- Extension of the low-and-middle income tax offset
- Childcare subsidy increase for families with multiple children
- $17.7 billion over 5 years to reform aged care
- $2.3 billion on mental health infrastructure and programs
- New and extended home ownership programs for first homeowners and single parents
There will also be a lot of money flowing through to the private sector to those capable of developing new technologies. Momentum and drive to develop new initiatives is a strong theme and in some circumstances the Government will offset the risk of those initiatives – if you are in the right sectors.
The $1.2 billion digital economy strategy seeks to rewrite Australia’s underlying infrastructure and incentivise business to boldly develop towards a digital future. The program is broad – from upskilling the workforce, the expansion of consumer digital rights, the development of SME digitisation, Government service delivery, to cybersecurity.
Beyond digital, co-funding and seed capital is available to those developing new technologies that reduce emissions and grow new export markets and jobs in this sector.
Productivity is a key take-out with several measures targeted at encouraging industry to innovate and develop including the extension of full expensing and the loss carry back measures.
What does the 2021-22 Budget mean for you? Download our free PDF here.
If we can assist you to take advantage of any of the Budget measures, or to risk protect your position, please contact us here