Click here to view our Federal Budget 2021-22 Client Guide.
The 2021-22 Federal Budget is a balancing act between a better than anticipated deficit ($106 bn), an impending election, and the need to invest in the long term.
Key initiatives include:
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 yeas 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
It is also a human budget (cynics would say voter focussed), with $17.7 billion dedicated to aged care, more money in the pockets of low income earners, the COVID vaccine rollout, $2 billion for mental health, a women’s economic package including a child care subsidy increase and funding to prevent violence, and a Royal Commission into defence and veteran suicide. There will also be a lot of money flowing through to the private sector to those that are capable of developing new technologies. Momentum and drive to develop new initiatives is a strong theme and in some circumstances the Government will offset the risk of those initiatives – if you are in the right sectors. The $1.2 billion digital economy strategy seeks to rewrite Australia’s underlying infrastructure and incentivise business to boldly develop towards a digital future. The program is broad - from upskilling the workforce, the expansion of consumer digital rights, the development of SME digitisation, Government service delivery, to cybersecurity. Beyond digital, co-funding and seed capital is available to those developing new technologies that reduce emissions, and grow new export markets and jobs in this sector. Productivity is a key take-out with several measures targeted at encouraging industry to innovate and develop including the extension of full expensing and the loss carry back measures.
View our Federal Budget 2021-22 Client Guide to read the update in detail.
Kind regards,
Peer Wealth
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Disclaimer: The material and contents provided in this article contains general information and does not take into account your personal objectives, financial situation or needs. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, please contact Peer Wealth on (02) 8014 7608.