The Federal Treasurer, Mr Josh Frydenberg, handed down the 2021–22 Federal Budget on 11 May 2021. This was possibly the most anticipated budget in history as the government outlines its plans for economic recovery post-COVID.
THE BIG NUMBER:
Good news is Australia has experienced a stronger than expected economic recovery from the COVID-19 recession. This has resulted in a budget deficit of $161 billion, $52.7 billion lower than the governments expected deficit.
BUDGET FOCUS:
The virus still poses a huge threat to our global and domestic economy. As such, this Budget is focused on various measures to support businesses and individuals with job creation, incentives, tax relief, and superannuation changes as well as domestic reforms to aged care, mental health, initiatives to support and protect women, and funds for various infrastructure programs.
KEY BUDGET ANNOUNCEMENTS:
- 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
- Child care 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 home owners and single parents
KEY ANNOUNCEMENTS FOR SUPERANNUATION:
- Removal of $450 threshold for employee superannuation guarantee
- First Home Super Saver Scheme contribution has increased to $50,000
- Downsizer Scheme expanded to people aged 60 and over
- Work test for people aged 67-74 has been removed for voluntary non-concessional contributions and salary sacrifices
- Residency requirements relaxed with safe harbor increased to 5 years for the central control & management test and the removal of the active member test
Expected to be legislation 1 July 2022.
FURTHER READING:
The Knowledge Shop have produced a full budget report which we are very happy to share with you.
How can Walsh Accountants help?
Our team of Gold Coast Accountants are here to help understand and keep you up to date as the details of these measures come to hand.
Should you wish to discuss any of these budget measures in relation to your personal circumstances, please do not hesitate to contact our office to speak with one of our Accountants.
