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Budget 2020-21 highlights: An economic recovery plan for Australia

Budget 2020-21 highlights: An economic recovery plan for Australia

For further information go to: budget.gov.au

Backing our Regions

The 2020-21 Budget continues to build a strong regional Australia and includes a number of measures that respond to the unique way regions have been impacted by the events of 2020.

This Budget ensures regions which are seeing strong population growth have the services and jobs they need, that regions in transition are supported to adapt to new circumstances and build resilience, and investments for all communities to make sure they continue to be great places to work and live.

Funding will flow directly to support stronger, more resilient regions through the following initiatives:

  • A further $200 million towards a fifth round of the Building Better Regions Fund (BBRF), including:
    • $100 million for broader community infrastructure and investment
    • $100 million for tourism-related infrastructure
  • $100 million over two years from 2020-21 to fund Regional Recovery Partnerships, which will coordinate investments with other levels of government to support recovery and growth in ten regions
  • $41 million in funding for a new Research and Development Program, comprising the Securing Raw Materials Program and a Regional Cooperative Research Centre Projects (R-CRC) Program
  • A further $30.3 million to the Regional Connectivity Program to expand the number of eligible projects that can be funded under this program, and enable a broader range of regional communities and businesses to leverage the benefits of improved digital connectivity, including in key sectors such as agriculture, tourism, health and education
  • An additional $22.7 million for a sixth round of the Stronger Communities Program, which provides grants of between $2,500 and $20,000 across the country for a range of locally-driven projects that aim to strengthen our regions, their economies and the vibrant communities which characterise them
  • The Building Resilient Regional Leaders initiative will invest $5 million over three years from 2020-21 to deliver place based leadership training
  • $4.6 million towards the Regional Australia Institute’s National Awareness Campaign, promoting the benefits and opportunities of living in regional Australia.

The Budget also confirms the Government’s funding commitment to the RDA program, with ongoing and indexed funding increasing over the coming years, from $18.9 million in 2020-21 to $19.4 million in 2023-24.

Statement by The Honourable Michael McCormack MP, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development:

Growing a Strong and Resilient Regional Australia

Business and Industry

Small and Medium Size Businesses
Businesses will benefit from changes to relieve tax pressures. Changes to instant asset write-off rules will mean 99 per cent of businesses will be able to fully deduct the total cost of eligible depreciable assets. Companies that have reported a loss due to the pandemic will be able to claim a tax refund through a loss carryback scheme. Businesses with a turnover of less than $5 million will be able offset losses against tax paid on prior profits, which will prompt a refund on prior tax paid. The measure is estimated to deliver $4.9 billion in tax relief. Credit reforms will also be introduced to ensure businesses have easier access to debt funding through loans.

Modern Manufacturing Strategy
Manufacturing is critical to a modern Australian economy and to economic recovery following the COVID-19 pandemic. It has an important role in many supply chains and adds significant value to all sectors. New initiatives in the 2020-21 budget include:

  • $1.3 billion over four years from 2020-21 to establish the Modern Manufacturing Initiative
  • $107.2 million over four years from 2020-21 for the Supply Chain Resilience Initiative
  • $52.8 million over three years from 2020-21 for the expansion of the Manufacturing Modernisation Fund.

Digital Business Plan
The Government is accelerating digital transformation to increase productivity and jobs growth to bring Australia closer to its goal of a leading digital economy by 2030.

Energy companies
Energy companies are set to benefit from a $1.9 billion investment in future technologies, such as hydrogen and carbon capture, that will lower emissions. The investment plan aims to lower costs for consumers and boost jobs in the sector.

Tourism operators
Businesses heavily reliant on international tourism will benefit from a $50 million Regional Tourism Recovery initiative to help them adapt their offerings, experiences and marketing to appeal to domestic visitors in the short term. Under an additional round of the Building Better Regions Fund, half of the $200 million for projects will be dedicated to tourism-related infrastructure. Under a COVID-19 recovery fund, $61.7 million will be invested in heritage upgrades, conservation work and reef building to create more fishing and diving spots.

FBT
The fringe benefit tax will be removed for employer-provided retraining and reskilling of employees who are redeployed to a different role in the business.

Recycling
Four year funding of $190 million will be allocated to a new Recycling Modernisation Fund.

Other New Initiatives

  • $124.5 million over four years from 2020-21 to continue and expand the Exploring for the Future program (Exploring for the Future 2).
  • $35.9 million over five years from 2020-21 for the expansion of the Boosting Female Founders Initiative.
  • $200 million for Implementing Australia’s Fuel Storage Program which will be a competitive grant program to help industry to transition to holding higher diesel stock levels.
  • $74.5 million for the Future Fuels Package with one of the measures enabling businesses to integrate new vehicle technologies using electricity, hydrogen or biofuels into their fleets.
  • $70.2 million over five years from 2020-21 for a grants program to boost Australia’s hydrogen industry through creation of a regional hydrogen export hub.
  • $50 million for the Carbon Capture, Use and Storage (CCUS) Development Fund. Deployment of CCUS has the potential to create not only jobs for regional Australian but also support innovative business opportunities in regional areas.

Jobs, Education and Training

  • The Government’s $74 billion JobMaker Plan is a key element of the Government’s Economic Recovery Plan for Australia, designed to support a stronger economic recovery and bring more Australians back to work.
  • The new $4 billion JobMaker Hiring Credit will provide businesses with an incentive to take on additional employees aged between 16 and 35 years old. Around 450,000 positions for young Australians will be supported through the JobMaker Hiring Credit.
  • The $1.2 billion Boosting Apprenticeship Commencements wage subsidy is a 50 per cent wage subsidy to all businesses who take on new apprentices from 5 October 2020 and will support 100,000 new apprentices and is available until 30 September 2021.
  • $2.8 billion Supporting Apprentices and Trainees wage subsidy to help businesses keep apprentices and trainees employed.
  • $62.8 million to 30 June 2022, for the Local Jobs Program which will be rolled out in 25 regions across Australia.
  • $252 million over two years to support the delivery of 50,000 higher education short courses in areas including teaching, health, information technology, science and agriculture.
  • The delivery of up to 30,000 additional university places in 2021 which means that more Australians will be able to get a university degree.
  • The establishment of a $1 billion JobTrainer Fund will support up to 340,700 additional free or low-fee training places for Australians to access new skills by retraining and upskilling them into sectors with job opportunities.
  • $240 million for programs for women to support new cadetships and apprenticeships in science, technology, engineering and mathematics, job creation and safety at work and at home. New mothers will also be paid parental leave despite losing their jobs during the pandemic. The Australian Government has changed the work test period for Paid Parental Leave (PPL), to help 9000 mothers who would otherwise miss out.

What's in it for...

Low- and middle-income earners
The Government will bring forward the second stage of its legislated tax cuts by two years, which means the 19 per cent tax bracket will move from $37,000 to $45,000 per year, and the 32.5 per cent bracket will move from $90,000 to $120,000.

This means lower and middle-income earners will get up to $2745 extra back for singles and up to $5490 for dual income families, compared with the 2017-18 financial year.

Australians who earn $40,000 per year will pay 21 per cent less tax this year compared to 2017-18, and those on $80,000 would pay about 11 per cent less.

Temporary visa holders
Backpackers, Pacific Islanders and seasonal workers will be able to extend their visas to stay in Australia longer.

Internet users
Under a $4.5 billion upgrade of the National Broadband Network, eight million households will be able to access super-fast internet. Under the plan, 75 per cent of all fixed-line customers will be able to choose to ratchet up their connection to one gigabit per second, up from the current baseline speed of 25 megabits per second.

People with mental health concerns
New funding will double the amount of Medicare-funded psychology sessions from 10 to 20 per year. Lifeline, Headspace, Beyond Blue and Kids Helpline will all benefit from a funding boost.

Superannuation account holders
Australians will no longer automatically get a new super account every time they change jobs, with compulsory contributions to be paid into the account they already have. Funds will also now be required to meet a performance test, and to notify members if they underperform. The government will also establish an online tool called YourSuper, which will allow users to compare different funds. These measures are expected to save the nation $450 million currently paid per year in unnecessary fees on multiple accounts.


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