The Federal Budget 2021-22 has many announcements and proposals aimed at economic recovery and includes investment in jobs, essential services, business incentives and tax cuts.
Budget Highlights for Business
- Temporary full expensing measures extended until 30 June 2023 – the time frame for eligible businesses to claim an immediate deduction for the total cost of depreciating assets has been extended to 30 June 2023, but affected assets must be installed ready for use by that time.
- Temporary loss carry-back rules extended – eligible companies can carry back tax losses from the 2023 financial year to offset tax bills from 2019 onwards.
- Administrative Appeals Tribunal now has the power to pause or modify ATO Debt recovery action – this will help to reduce the legal fees and red tape for small business.
- Tax cuts – small to medium company tax rates will reduce to 25% from 1 July as planned.
- Recognition of occupational licences – reduced regulatory burden for people who work across multiple states.
- Digital Economy Strategy whole of government plan – funding for digital cadetships, innovation investment incentives, e-invoicing, cyber security, overhaul of myGov and building small to medium business digital capacity.
Budget Highlights for Individuals
- Personal income tax cuts – the low and middle income tax offset continues for another year.
- Medicare levy low-income thresholds increase
- Self-education expenses – full cost of eligible self-education can be claimed, rather than just the excess over $250.
- Changes to work test – this test will no longer be required for non-concessional contributions and salary sacrifice, but still required for those aged 67-74 who want to make personal concessional contributions.
- Downsizer contributions – now allowed for people over 60.
- SMSF and residency – rules relaxed to allow concessional tax treatment for more people temporarily away from Australia.
- $450 monthly minimum for SGC – proposal to remove threshold for casual employees, so that all employees will be required to have employer superannuation supprt.
Other funding announcements include guaranteeing essential services, COVID-19 vaccine rollout, industry-specific measures, investment in employee training and mental health support measures.
For full details, visit Budget 2021-22.
Talk to us about how you or your business can benefit from the budget announcements.