The Treasurer, Josh Frydenberg, delivered the 2020-21 Federal Budget last night and in his words it was “all about jobs”.
The Treasurer set out the devastating financial impact that the COVID-19 pandemic has wreaked globally (“economy is expected to contract by 4.5 per cent this year compared to just 0.1 per cent during the GFC”) and in Australia (“in the space of just one month, more than one million Australians lost their jobs”).
Therefore, the Budget measures announced are mainly focussed on stimulating the economy and creating jobs. These range from kick-starting investment in the private sector to the new JobMaker program to encourage workforce participation. Further, tax concessions in the form of personal tax cuts, the re-introduction of loss carry back rules and the widening of the small business concession eligibility thresholds are welcome. The pandemic exposed vulnerability in Australia’s sovereign manufacturing capability. In light of this and the ingenuity that has been displayed by businesses pivoting into new spheres, several measures were introduced including a Modern Manufacturing plan and additional Research and Development incentives.
The Australian economy is forecast to fall by 3.75% in 2020 and unemployment to peak at 8% by the end of the year. In 2021, the Budget predicts growth of 4.25% and a fall in unemployment to 6.5% by June 2022. Although, unfathomable last year when the Government was looking to return the Budget to surplus, there will be nearly $1 Trillion in gross debt by next year. Clearly we are in the phase of rebuilding – regrowing the economy, restoring stability and building business confidence.
This is the Government’s economic roadmap to recovery.
We are pleased to share our Federal Budget summary detailing the specific measures with a particular emphasis on private business.