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 – eligible businesses can claim an immediate deduction for the total cost of depreciating assets.
  • 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 given the power to pause or modify ATO Debt recovery action – reducing 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.

 

Superannuation Highlights

  • Changes to work test – no longer required for non-concessional contributions and salary sacrifice, but still required for those aged 67-74 who want to make personal 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.

 

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.