07 Sep May Federal Budget 2021
The Treasurer, Josh Frydenberg, delivered the Federal Budget on Tuesday, 11 May 2021 which focuses on the next stage in securing Australia’s recovery from COVID-19. The Budget concentrates on government spending and Australia’s response to COVID-19, while ensuring essential services are readily available to build a more resilient and secure Australia.
The following is a snapshot of some of the announcements made as well as several proposals that will impact individuals and small businesses.
For clarification on how the budget impacts you, your business or your family, please reach out to your Matrix Norwest advisers and tax specialists.
Matthew Stevenson, Rob Pedersen,
Alison Stevenson and Lachlan Sue
Partners, Matrix Norwest
Personal Income Tax
- An additional $7.8 billion in tax cuts approved for low and middle-income earners through the extension of the Low and Middle Income Tax Offset for another year – up to $1,080 for individuals and $2,160 for couples.
- Increasing the Medicare Levy low-income thresholds, meaning more low-income tax payers will continue to be exempt from paying the Medicare levy.
Business Tax Support
- Extension of the immediate asset write off provisions, allowing small to medium size businesses to immediately write off depreciable assets in the year of purchase until 30 June 2023.
- Extension of the temporary loss carry-back measure from the 2023 financial year to offset previously taxed profits as far back as the 2019 financial year.
- Repealing the work test for those aged 67 to 74 for non-concessional and salary sacrificed contributions
- Extending access to downsizer contributions by lowering the minimum age to gain access from 65 to 60
- Offering pensioners a temporary 2-year opportunity to exit from certain legacy retirements products
- Abolishing the $450 per month income threshold for Super Guarantee (SG) contributions
- Relaxing residency requirements for SMSFs by lengthening the temporary foreign central management and control test to 5 years
- Increasing the releasable voluntary contributions under the First Home Super Saver Scheme for first home buyers from $30,000 to $50,000
- Extending the HomeBuilder construction commencement period and the New Home Guarantee
- Investing in growing Australia’s digital economy
- Supporting our worst hit regions and sectors – aviation and tourism
- Further investment in the COVID-19 vaccination program
- $13.2 billion funding to the National Disability Insurance Scheme (NDIS) to support people with disabilities
- $17.7 billion to fund aged care reforms and ensure older Australians are well looked after
- $2.3 billion into mental health care and suicide prevention
- Additional investing in preschools
Building a resilient and secure Australia
- Investing in national security and law enforcement
- Keeping energy affordable and reliable
- Leading the way in medical and biotech innovation
- Support communities affected by natural disasters
In line with changes made in previous budgets, the government has also reconfirmed several legislative changes that are to be implemented from 1 July 2021 that will impact personal and business tax rates as well as compulsory superannuation payments and caps in relation to contributions and super balances. Matrix Norwest will provide a detailed review of the upcoming changes in our next end of financial year bulletin in order to keep you informed of your entitlements and responsibilities under the changes.