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Budget 2021: What’s in it for you
The federal government had handed down possibly the second most anticipated budget in history, outlining its plans to help the economy recover post-COVID. Here’s a breakdown of what’s in store for you.
Budget 2021: What’s in it for you
The federal government had handed down possibly the second most anticipated budget in history, outlining its plans to help the economy recover post-COVID. Here’s a breakdown of what’s in store for you.
Jobs, jobs, jobs
The Treasurer confirmed the budget is all about the Australian people, about guaranteeing their essential services, about creating more jobs and keeping Australians safe from COVID‑19.
As such, in this budget, the government will double its commitment to the JobTrainer fund.
“Supporting a total of more than 450,000 new training places to upskill jobseekers and young people. At a cost of $2.7 billion, we will create more than 170,000 new apprenticeships and traineeships,” the Treasurer said.
It takes the total number of places in JobTrainer, which was announced mid-last year as part of a $2 billion package, to about 450,000.
The government has lowered its unemployment target, now believing unemployment needs to start with a 4 in order to spur wage growth and inflate Australia’s debt away.
Tax cuts for millions of Aussies
Low- and middle-income earners no longer face a tax rise following the announced extension of the low and middle income tax offset (LMITO).
Under the extension, the LMITO – a one-off tax offset worth $1,080 to those earning from $48,000 to $90,000 – will be temporarily retained for the entirety of 2021-22 financial year, costing the budget around $7.8 billion.
By extending the LMITO, the Treasurer has put to rest allegations that the government was preparing to pull forward the next stage of its tax plan – stage three.
Namely, while stage three tax cuts aren’t supposed to commence until 1 July 2024, pundits did speculate that the government could in fact bring them forward to unburden business.
The stage three tax cuts are the largest and most controversial reform to the current system, with all Australian workers earning between $45,000 and $200,000 set to receive the same flat 30 per cent tax rate.
Super changes
Treasurer Josh Frydenberg has scrapped the $450 a month threshold beyond which employers are obliged to pay super, helping to boost the retirement income of thousands of part-time workers.
The Treasurer also announced the expansion of the criteria for the government’s existing downsizer scheme (introduced in the 2017 budget) to include Australians aged 60 years and over. The scheme, which allows participants to make a one-off $300,000 contribution to their super, was previously only available to Australians aged 65 years or older.
Additionally, under the expanded First Home Super Saver Scheme, eligible first home buyers will be able to release up to $50,000 in eligible superannuation contributions to bolster their deposit.
$2.3 billion on mental health
The Treasurer announced $2.3 billion over four years to boost mental health funding.
The bulk of the funding is said to be going to treatment centres and suicide prevention efforts. Namely, $1.4 billion will go towards funding Commonwealth mental health centres, $300 million will go towards suicide prevention, while $100 million is set to fund suicide prevention for vulnerable communities, including Indigenous people.
Childcare
The Treasurer has announced a $1.7 billion investment into childcare services in a move set to benefit over 400,000 Aussie families. The government will target low- and middle-income families, trying to get them to work an additional day.
As part of the 2021-22 budget, the current $10,560 cap on the childcare subsidy will be removed.
Second, families with two or more children aged 5 and under will receive a 30 per cent increase in the subsidy for their second and subsequent children up to a maximum of 95 per cent of fees paid.
Treasury confirmed the changes will come into effect from 1 July 2022.
Aged care
Treasurer Josh Frydenberg has announced a much-needed $10 billion-plus aged care package spread over four years.
While larger than previously expected, it is predicted to be roughly a quarter the size of the $10 billion a year needed according to the aged care royal Commission findings.
Treasurer announces home loan assistance packages for single parents
Mr Frydenberg reconfirmed the introduction of a housing scheme to enable single parents to buy a home with only a 2 per cent deposit.
The program, known as the Family Home Guarantee, will see single parents needing to save approximately $8,000 to put towards a deposit.
The remaining 18 per cent will now be backed by the Australian government.
The new Family Home Guarantee for single parents will support up to 10,000 parents with dependents over 4 years from 1 July 2021.
The scheme is similar to the first home buyers with parents subjected to price caps.
Super savings booster for retirees
The eligibility criteria for the government’s existing downsizer scheme (introduced in the 2017 budget) is being expanded to include Australians aged 60 years and over.
The scheme, which allows participants to make a one-off $300,000 contribution to their super, was previously only available to Australians aged 65 years or older.
$15bn infrastructure spend
The Treasurer confirmed the government is spending over $15 billion over a period of 10 years on a number of infrastructure projects, including:
- $2 billion initial investment for a new Melbourne Intermodal Terminal for the transfer of freight
- $2.03 billion for Great Western Highway Upgrade - Katoomba to Lithgow - construction of east and west sections in NSW
- $400 million for Inland Freight Route (Mungindi to Charters Towers) upgrades in Queensland
- $161.6 million for the Truro Bypass in South Australia
- $160 million for Agricultural Supply Chain Improvements - ‘Package 1’ in Western Australia
- $150 million for National Network Highway upgrades (Phase 2) in the Northern Territory
- $80 million for Bass Highway safety and freight efficiency upgrades in Tasmania
- $26.5 million for William Hovell Drive duplication in the ACT
Digital economy strategy set for $1.2bn boost
The latest round of funding will see the government spend $1.2 billion on growing Australia into a “modern and leading digital economy” by 2030.
Despite experts claiming Australia is behind its peers, the government said Australia’s place in the world will be defined by how it adapts to digital technology, with Treasurer Josh Frydenberg opining a vibrant digital economy is key to Australia’s economic future.
“Our digital economy strategy will allow Australian businesses to capitalise on the opportunities that digital technologies are creating,” the Treasurer said earlier.
Women’s health initiatives
As announced on Mother’s Day, the government is putting $354 million into a number of new health measures targeted at women’s health.
Key initiatives include $100.4 million for improvements to cervical and breast cancer screening programs, support for mental health and wellbeing of new and expectant parents, and new genetic testing of embryos prior to implantation.
Nearly $27 million will go towards support for people with eating disorders and their families.
Moreover, the Treasurer announced a further $1.1 billion for women’s safety.
Tourism and aviation support
The Treasurer announced a further $1.2 billion to rescue the industries hit hardest by the pandemic, including tourism and aviation.
However, he confirmed international borders will remain shut until next year.
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