Introduction

 The Federal Budget includes the priorities that the MTA Queensland submitted to provide Members with the confidence to invest and employ.

Economic Statistics

Deficit:                                     $213.7 billion this year, falling to $66.9 billion by 2023-24.

Net debt:                                  Net debt will increase to $703 billion or 36 per cent of GDP this year and peak at $966 billion or 44 per cent of GDP in June 2024.

GDP:                                        4¼ per cent

Employment:                         2¾ per cent

Unemployment rate:           Unemployment to peak at 8 per cent in the December quarter. Unemployment to fall to 6.5 per cent by the June Quarter 2022.

Wage Price Index:                1¼ per cent

Consumer Price Index:       1¾ per cent

Personal income tax  

The 2020-21 Budget brings forward Stage two of the Personal Income Tax Plan by two years. From 1 July 2020:

• the low income tax offset will increase from $445 to $700;
• the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000;
• the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.

The Government will also provide additional targeted support to low- and middle-income Australians. In 2020-21, low-and middle-income earners will receive a one-off additional benefit of up to $1,080 from the low and middle income tax offset (LMITO).

Business                  

Instant Asset Write Off

From tonight, over 99 per cent of businesses will be able to write off the full value of any eligible asset they purchase for their business. This will be available for small, medium and larger businesses with a turnover of up to $5 billion until June 2022.

Loss carry back

Companies that have been doing it tough throughout this crisis will be able to use their losses earlier. Losses incurred to June 2022 can be offset against prior profits made in or after the 2018‑19 financial year.  The combination of the immediate expensing and loss carry-back measures will create an additional 50,000 jobs across the country.

Compliance reduction

The Government will provide the Commissioner of Taxation with the power to allow employers to rely on existing corporate records, rather than employee declarations and other prescribed records, to finalise their fringe benefits tax (FBT) returns. The measure will have effect from the start of the first FBT year (1 April) after the date of Royal Assent of the enabling legislation.

The Government will expand access to a range of small business tax concessions by increasing the small business entity turnover threshold for these concessions from $10 million to $50 million. Businesses with an aggregated annual turnover of $10 million or more but less than $50 million will for the first time have access to up to ten further small business tax concessions in three phases:

• From 1 July 2020, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure.
• From 1 April 2021, eligible businesses will be exempt from the 47 per cent fringe benefits tax on car parking and multiple work-related portable electronic devices (such as phones or laptops) provided to employees.
• From 1 July 2021, eligible businesses will be able to access the simplified trading stock rules, remit pay as you go (PAYG) instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods under the small business entity concession. Eligible businesses will also have a two-year amendment period apply to income tax assessments for income years starting from 1 July 2021, excluding entities that have significant international tax dealings or particularly complex affairs.

In addition, from 1 July 2021, the Commissioner of Taxation’s power to create a simplified accounting method determination for GST purposes will be expanded to apply to businesses below the $50 million aggregated annual turnover threshold.

These changes will simplify eligibility and reduce red tape for around 20,000 businesses, as more turnover thresholds will align to the aggregated annual turnover threshold for a base rate entity for company tax purposes. The eligibility turnover thresholds for other small business tax concessions will remain at their current levels. This measure is estimated to decrease receipts by $105.0 million over the forward estimates period.

SME digital capability

$19.2 million in 2020-21 to expand the Australian Small Business Advisory Services— Digital Solutions program to an additional 10,000 small businesses.

$3.0 million over four years from 2020-21 to develop a Digital Readiness Assessment tool to help businesses self-assess their digital maturity and provide them with, and to support leaders of Australian organisations to improve their digital literacy and decision-making

$2.5 million in 2020-21 to support an industry-led Digital Skills Finder Platform to enable Australian workers and small to medium enterprises to easily find digital skills training courses for reskilling and upskilling in digital literacy.

The Government is providing $796.5 million over four years from 2020-21 through its Digital Business Plan to further drive progress towards Australia becoming a leading digital economy by 2030 and to improve productivity, income growth and jobs by supporting the adoption of digital technologies by Australian businesses. The measures cover the following pillars: modern digital infrastructure, reduced regulatory barriers, small and medium enterprise (SME) support and capability and a digital government that is easier to do business with.

 Infrastructure

$14 billion in new and accelerated infrastructure projects to support a further 40,000 jobs.

 Skills & Training        

JobMaker Hiring Credit

The $4 billion JobMaker Hiring Credit will be payable for up to 12 months for each new job and is available from tomorrow to employers who hire eligible employees aged 16-35.  The Hiring Credit will be paid quarterly in arrears at the rate of $200 per week for those aged between 16-29, and $100 per week for those aged between 30-35. Eligible employees are required to work a minimum of 20 hours per week.  To be eligible, employers will need to demonstrate an increase in overall employee headcount and payroll for each additional new position created.  Treasury estimates that this will support around 450,000 jobs for young people

JobTrainer

$1 billion JobTrainer fund to create up to 340,000 free or low‑cost training places for school leavers and job seekers. Committed $2.8 billion to protect 180,000 apprenticeships and trainees. A new 50 per cent wage subsidy for all businesses that take on new apprentices over the period 5 October 2020 to 30 September 2021. The $1.2 billion Boosting Apprenticeship Commencements wage subsidy will support the next generation of skilled workers through 100,000 new apprentices.  The subsidy will be capped at $7,000 per quarter for gross wages for new apprentices and trainees. This measure is in addition to financial support already provided under the Government’s $2.8 billion Supporting Apprentices and Trainees package for existing apprentices and trainees, which is now expected to support 90,000 employers to keep 180,000 apprentices and trainees in employment and training.

To help Australians get a job funding for:

• 50,000 new higher education short courses in agriculture, health, IT, science and teaching
• 12,000 new Commonwealth supported places for higher education in 2021
• 2,000 indigenous students through the Clontarf Foundation to complete Year 12 and pursue further education or find employment.

Extra Support for Job Seekers

• $49.5 million to fund an additional 14,485 places in the Skills for Education and Employment (SEE) program to ensure new job seekers who lack basic language, literacy and numeracy skills can access the training and support they need.

Fringe Benefit Tax

The Government will introduce an exemption from the 47 per cent fringe benefits tax (FBT) for employer provided retraining and reskilling benefits provided to redundant, or soon to be redundant employees where the benefits may not be related to their current employment. This measure applies from announcement.

Women’s Economic Security Statement,

$240 million in measures and programs to support:

• New cadetships and apprenticeships for women in science, technology, engineering and mathematics
• Job creation and entrepreneurialism, and
• Women’s safety at work and at home

Modern Manufacturing $1.3 billion plan

It will target six national manufacturing priorities:

• food and beverage manufacturing
• resources technology and critical minerals processing
• medical products
• recycling and clean energy
• defence industry, and
• space industry.

This plan is built on the JobMaker platform of enabling our manufacturing businesses to be globally competitive through cheaper and more reliable energy.  Better skills and training.  Lower taxes.  Less red tape and more flexible workplaces.  Research and Development, the adoption of digital technology, and affordable and reliable energy will be critical to Australia’s future economic prosperity.

Automotive Taxation

Luxury Car Tax             $540 million (-$140 million -20.6 per cent)

Since the 2019-20 MYEFO, luxury car tax (LCT) receipts have been revised down $0.1 billion in 2020-21 and $0.7 billion over the four years to 2023-24. LCT receipts are forecast to decline by 5.3 per cent in 2020-21, and grow by 0.4 per cent on average over the four years to 2023-24. This is consistent with a decline in the sales of vehicles subject to LCT.

Fuels excise:                    Petrol $5,550 million (-$700 million -11. 2per cent)
Diesel $11,930 ($690 million -5.5 per cent)

Customs duty:                Passenger Vehicles $310 (-$20 million -6.1 percent)