2020 has been a challenging year for many Australians which has seen the Government forced to intervene to provide economic support and legislative provisions in an attempt to provide ongoing assistance to many Australians and businesses.
The 2020 Federal budget sees the Government continuing to provide additional support and has committed an additional $25 billion in COVID-19 response measures. This brings the Government’s COVID-19 Response Package to a total of $198 billion, including $184 billion in economic response measures and $14 billion in health response measures.
These measures include the following:
- An extension of the temporary JobKeeper Payment.
- Introduction of a Pandemic Leave Disaster Payment.
- JobMaker Hiring Credit – the Government will provide financial support to employers to take on additional employees through a hiring credit. Eligible employers who can demonstrate that the new employee will increase overall employee headcount and payroll will receive $200 per week if they hire an eligible employee aged 16 to 29 years, or $100 per week if they hire an eligible employee aged 30 to 35 years.
- From 5 October 2020 to 30 September 2021, businesses of any size can claim a new “Boosting Apprentices Wage Subsidy” for apprentices or trainees who commence during this period.
- From 6 October 2020 until 30 June 2022, businesses with an aggregated annual turnover of up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are first used or installed ready for use. The cost of improvements made during this period to existing eligible depreciable assets can also be fully deducted.
- Companies with an aggregated turnover of less than $5 billion will be allowed to offset tax losses against previous profits on which tax has been paid, to generate a refund. Eligible companies can carry back tax losses from the 2019-20, 2020-21 and/or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years.
- Expanding access to a range of small business tax concessions for small to medium businesses by lifting the aggregated annual turnover threshold from $10 million to $50 million.
- Strengthening of the COVID-19 health response, with a commitment of an additional $4.9 billion in this Budget to provide critical health care and support.
- $750 million for COVID-19 testing.
- A further $1.1 billion to support hospitals in responding to COVID-19, including funding for private hospitals to ensure they are available to support the response.
- $1.7 billion to secure access to over 84.8 million doses of potential vaccines being developed by the University of Oxford and the University of Queensland. The Government is also investing $123 million to join the international COVAX facility, securing access to a large portfolio of potential vaccine candidates around the world.
- Investing in research and development into COVID-19 vaccines and treatments with funding of almost $6 million from the Medical Research Future Fund’s Coronavirus Research Response. This will support research and development of COVID-19 vaccines at Australian universities.
- $112 million to support the continuation of temporary Medicare rebated telehealth services.
- $3.2 billion investment in Personal Protective Equipment.
- $245 million for residential aged care providers to assist with additional costs, including infection control training and outbreak preparedness.
- $205.1 million for the Workforce Retention Bonus Payment.
- $47.3 million, including $26.9 million to create 15 mental health clinics across Victoria.
The Government is also continuing the COVID-19 supplement to all Commonwealth-funded aged care providers and the 30 per cent increase in the viability supplement and the residential care homeless supplement for a further six months ($245 million). Further funding helps providers cover the costs of implementing single site workforce arrangements in hotspots ($92.4 million).
Given the impact of COVID-19, this is a very significant budget and these key measures (and others) will play a major role in Australia’s recovery.
As always, our team are here to support you with any questions you may have. If you would like to discuss any aspects of the Treasurer’s budget, please contact a member of our team:
- Corporate and Commercial
- Workplace Relations
- Tax
Sources
1. Federal Budget 2020-21 materials – Budget Paper No.2 2020-21
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