Federal Budget Overview 2021 - 2022

To assist our Members in understanding what the 2021/22 Federal Budget means for you and your business, please find the following key significant announcements released on Tuesday 11th May 2021. 



The Federal Government has announced a number of measures targeting small businesses, or of potential benefit to small businesses, in its 2021-22 Budget.

Small Business

• The Government is extending temporary full expensing for an additional year until 30 June 2023. Temporary loss carry-back is also being extended to include the 2022-23 income year.

• To assist small businesses to pause or modify Australian Taxation Office debt recovery actions, the Government is broadening the Administrative Appeal Tribunal’s (AAT) powers to pause or modify such actions until the underlying dispute is resolved.

• Building Capabilities and Incentivising Digital Adoption: Small businesses will be assisted to adopt digital technologies through a $12.7 million expansion of the Digital Solutions – Australian Small Business Advisory Services. A further $15.3 million will be used to drive business uptake of e-invoicing.

• The Government will deliver more than $16billion in tax cuts to small and medium businesses by 2023-24 with around $1.5billion flowing in 2019‑20.This includes reducing the tax rate for small and medium companies, from 30percent in 2014‑15 to 25percent from 1 July 2021.

Education and Training

• The Government is spending an additional $2.7billion to extend the Boosting Apprenticeship Commencements program.The demand-driven program is expected to support more than 170,000 new apprentices and trainees by paying businesses a 50percent wage subsidy over 12months for newly commencing apprentices or trainees signed up by 31 March 2022. The subsidy will be capped at $7,000 per quarter per apprentice or trainee.

• The Government is also delivering pathway services for 5,000 women to commence in a non-traditional apprenticeship. There will be$95.9 million in fundinggoing towards supporting women’s careers at all stages, from education and training to returning to the workforce after a career break.

• Expanding the Local Jobs Program: The Government is investing $213.5million to extend and expand the Local Jobs Program to all 51 employment regions across Australia. This program brings together expertise, resources and access to funding at a local level to help job seekers connect to employment, reskilling and upskilling opportunities.

• Encouraging Self Employment: Reforms and additional funding of $129.8million for the New Business Assistance with New Enterprise Incentive Scheme (NEIS), Exploring Being My Own Boss Workshops and Entrepreneurship Facilitators will make self-employment support more flexible and easier for job seekers and existing micro-business owners to access. A broader range of services will be offered, including:

Individual - Tax Cuts to Create Jobs

• The Government is delivering a further $7.8billion in personal income tax cuts to support more than 10million low- and middle-income earners worth up to $1,080 for individuals or up to $2,160 for couples.

• This is on top of the $25.1billion of announced tax cuts flowing to households in 2021‑22 under our legislated Personal Income Tax (PIT) Plan.

• With the additional year of the low and middle income tax offset (LMITO), our PIT Plan will provide tax cuts of up to $7,020 for individuals, and up to $14,040 for couples, in total over the period from 2018-19 to 2021‑22.

Superannuation

• Removal of the current $450 per month minimum income threshold. By removing the $450 a month threshold to pay compulsory super is expected to increase the retirement incomes of thousands of part-time workers. Women account for 68% of Australia’s part-time workers. This superannuation change will therefore be of particular benefit to female part-time workers

• Self-managed Super Funds (SMSF) – residency rules to be relaxed allowing SMSF members to contribute to their funds while living overseas. Central management and control absence rules to increase to five years.

• SMSF members with legacy retirement products will be able to exit these products under a two-year amnesty. Members will have access to the underlying capital and associated reserves to either retain in accumulation phase or commence a more modern retirement product

• Work test repealed for voluntary contributions to superannuation including non-concessional contributions and salary sacrifice contributions but not personal deductible contributions

• Eligibility age for downsizer contribution reduced to 60 years of age