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Federal Budget 2021: What it means for you

·19-min read
Federal Budget 2021: What is means for you. Source: Getty
Federal Budget 2021: What is means for you. Source: Getty

If last year’s budget was about keeping the economy afloat, the 2021 Federal Budget is laser-focused on turbo-charging Australia’s economy by slashing red tape, creating more than 250,000 jobs, and lifting unemployment.

“Australia is coming back,” said Treasurer Josh Frydenberg in Canberra today. “This Budget will ensure we come back even stronger, securing Australia’s recovery.”

The 2021 Budget contains billions of dollars dedicated to tax cuts for individuals and businesses, measures to support women, assistance for young Aussies seeking work, as well as funding for crucial industries such as aged care, disability care, infrastructure, and skills training.

More on Federal Budget 2021:

In a major sign of Australia’s economic recovery, the national deficit, which was an eye-watering $214 billion just seven months ago, has dropped to $161 billion and is forecast to drop further to $106.6 billion in the 2021-22 financial year.

But emergency stimulus measures introduced at the height of the pandemic have weighed on national debt, which has ballooned to $617.5 billion (30 per cent of Australia’s GDP) and slated to rise further to 41 per cent of Australia’s GDP by June 2025.

No matter who you are, if you live in Australia, you’ll be affected in some way by this suite of measures.

Here’s what the 2021-22 Federal Budget means for you:

If you want a tax cut…

You got it. The low and middle-income tax offset (LMITO) has been extended through the 2021-22 financial year.

Around 10.2 million Aussies are expected to benefit from these offsets that will see a $1,080 benefit to individuals or $2,160 for dual-income couples.

There was some confusion in previous years about this tax offset; just bear in mind you won’t see the ATO deposit this amount as cash in your bank account. Rather, whatever your tax bill is will be reduced by the amount you are eligible for.

If you earn $37,000 or less…

Your tax bill will be offset by up to $255.

If you earn between 37,000 to $48,000…

The offset will rise at a rate of 7.5 cents per dollar, with the maximum offset capped at $1,080.

If you earn between $48,000 and $90,000…

You’ll get the $1,080 offset.

If you earn between $90,000 and $126,000…

The offset starts tapering off at a rate of 3 cents per dollar.

If you earn more than $126,000…

There won’t be any tax offset for you.

If you’re unemployed…

The Government will spend $4.6 billion to help jobseekers gain employment.

Aimed at helping young Aussies, single parents, and the long-term unemployed, the Government will raise wage subsidies available via jobactive, Transition to Work and ParentsNext to $10,000.

A further $23.6 million will be invested in expanding access to basic literary, maths, and computer skills training for job seekers.

Meanwhile, many measures that have already been announced – such as the ‘DobSeeker’ hotline, the strengthening of mutual obligations and the additional $50 a fortnight to the JobSeeker payment rate – are already in place.

Aussies will also be encouraged to be entrepreneurs, with $129.8 million for schemes to help people set up their own micro-business.

26 more virtual and physical Job Fairs will also be delivered to help connect jobseekers and employers.

If you’re young and unemployed…

The Government is trying to get you into a job – and with good reason, youth unemployment is still double that of the jobless rate.

$506.3 million will be spent across two years to extend JobTrainer to deliver 163,000 extra low-fee and free training places to plug skill shortages. This will include 33,800 for aged care skills courses and 10,000 for digital skills courses.

$10.7 million will be spent on trialling four industry-led pilots of digital skills cadetships. This will be in booming tech areas such as AI, quantum computing, and robotics.

Transition to Work service will also get a $481.2 million injection to help young Aussies between 15-24 find work.

An extra $7.6 million will go towards the National Careers Institute to connect young people with further education and training, and $213.5 million will go to expanding the Local Jobs Program.

If you’re an apprentice or trainee…

An extra $2.7 billion spread out over four years will go towards apprenticeship and trainee subsidies, which will create 170,000 new apprenticeships and traineeships.

Women will also be encouraged to get into the trades, with an additional 5,000 “gateway service places”.

If you’re unemployed in a remote area…

The government will pilot a new Remote Jobs Program in three sites for remote Aussies.

If you’re a business owner…

The Government wants to lighten your tax and regulatory burdens to encourage you to hire. You’ll pay less taxes, for one: the corporate tax rate will drop to 25 per cent from 1 July 2021. (This is down from 30 per cent in 2014-15.)

Other measures like temporary full expensing and temporary loss carry-back is being stretched to include the 2022-23 financial year. By extending this measure, businesses are expected to pay $20.7 billion less tax over the forward estimates period; support $320 billion in investment; create 60,000 jobs by 2022-23; and boost GDP by $18 billion by July 2023.

Red tape will also be slashed; a $134.6 million package will go towards deregulation.

And if you’re in the middle of a debt dispute, the Administrative Appeal Tribunal (AAT) will get new powers to pause or modify ATO debt recovery actions until the dispute has been determined by the AAT.

If you want the COVID-19 vaccine…

A further $1.9 billion will be committed the vaccine roll-out, with these funds to go towards administering the vaccines, managing distribution and logistics, handling the data, communications, and lending a hand to states and territories.

If you want more in superannuation…

The $450 per month minimum income threshold currently in place, which means bosses don’t have to pay super to employees earning below this amount, will be scrapped.

This is aimed at closing the super gender gap and will see 300,000 more people be paid super every month, nearly 2 in 3 of which are women.

If you’re an aged care resident, or work in aged care…

You’re receiving the most funding out of every other group in this budget. The scars of the Aged Care Royal Commission has seen the Morrison Government dedicate $17.7 billion to this sector. Here’s a breakdown:

  • $7.8 billion will go towards reforming residential care. A new funding model will be introduced, called the Australian National Aged Care Classification;

  • $6.5 billion will go towards home care, funding 80,000 extra Home Care Packages;

  • $365.7 million will fund better access to health services, including GPs, and the independent Aged Care Quality and Safety Commission will get a further $301.3 million;

  • 33,800 new training places will be created via JobTrainer to help new and existing care workers improve their qualifications;

  • $630.2 million will be specifically dedicated to improving aged care for Aboriginal and Torres Strait Islander peoples, special needs groups, and those living in regional, rural and remote communities; and

  • $21.1 million has been set aside to ensure things don’t fall between the cracks, going towards “new arrangements … for more effective system oversight”.

If you’re on the NDIS scheme…

An additional $13.2 billion will be funnelled across four years towards better supporting Australians with disability.

And if you have a young child with developmental concerns or disability, $17.9 million has been set aside for early intervention support.

If you’re an older Australian…

You’ll be able to add more to your nest egg. The work test for non-concessional and salary sacrificed superannuation contributions will be repealed, allowing Aussies between 67-74 to contribute more to their super.

And from 1 July 2022, the minimum age to make a contribution of up to $300,000 per person to their super when they sell their home will be lowered from 65 to 60.

If you like Medicare…

Medicare services will get $220 million spread across four years to update and add new health services to the Medicare Benefits Schedule.

And if you need paediatric cancer therapy or need to get tested for IBS, these will now be Medicare-rebated.

And more low-income Aussies will be able to side-step the Medicare levy, with the threshold rising from $22,801 to $23,226 to keep pace with the consumer price index.

If you get medicines through the Pharmaceutical Benefits Scheme (PBS)…

$878.7 million has been dedicated to keeping medicines affordable. Under this scheme, lifesaving medicines are available at $41.30 per script.

If you need help with your mental health…

The Government has dedicated $2.3 billion towards mental health prevention and treatment services, suicide prevention services, and bolstering the mental health workforce.

If you’re an Indigenous or Torres Strait Islander Australian…

The Government is dedicating $243.6 million to improve economic, social and educational outcomes for Indigenous Australians.

This will be spread out across five years. Here’s a quick breakdown:

  • $128.4 million for a new jobs program to better prepare Indigenous Australians for the workforce;

  • $36.7 million for the Prescribed Bodies Corporate;

  • $84.9 million for the Community Development Program to help Indigenous peoples in remote areas return to work;

  • $13.1 million pilot for a new remote jobs program;

  • $28.1 million for the Indigenous visual arts industry;

  • $99.3 million across four years to deliver face-to-face services in remote areas to provide direct access to payments and Government services.

If you’re a woman…

With the treatment of women firmly in the media spotlight over the last few months, the Government has brought back the Women’s Budget Statement (which used to be an annual budget staple, but disappeared when the Abbott Government came to power in 2014).

This Budget includes a suite of measures designed to support women. Here’s a breakdown:

  • $1.1 billion will provide financial support and emergency accommodation for women and their children leaving violent relationships;

  • $376.2 million to providing legal support to women to navigate the legal system;

  • $20.5 million to address sexual harassment in the workplace as a response to the Respect@Work report;

  • $6 million towards the Workplace Gender Equality Agency to prevent and respond to workplace harassment;

  • $26.2 million to improve the safety of online spaces for women and children;

  • $16.6 million for ongoing programs covering maternal, sexual, and reproductive health;

  • $5 million for women suffering pelvic pain and endometriosis;

  • $13.7 million to expand the Women and Infants Research Foundation nationally (currently trialling in WA);

  • More breast cancer treatments listed on the PBS;

  • $10.3 million to extend the Temporary Visa Holders payment pilot for women experiencing family or domestic violence;

  • $29.3 million for the safety, social inclusion and economic participation of migrant and refugee women;

  • $9.3 million to prevent and respond to violence against women and girls with disability.

If you’re a woman looking to advance in your career…

The Women’s Leadership and Development Program will be injected with an extra $38.3 million in funding, aimed at creating new jobs, economic security, safety, and international engagement.

And if you’re a woman wanting a STEM qualification, $42.4 million has been put aside for this goal.

If you pay for childcare…

An extra $1.7 billion will go towards making childcare more affordable, a measure that has already been announced.

Around 400,000 families will benefit (particularly low and middle-income families). From 1 July 2022, child care subsidies will be increased. A single parent on $65,000 with two children in four days of long day care will be able to work a fifth day and be $71 better off. 

If you have a child in preschool…

$2 billion has been set aside towards something called the Strategic Reform Agreement that will stretch from 2022 to 2025 aimed at increasing participation in the national preschool system and improve kids’ readiness for school. This funding aims to provide access for all children to 15 hours a week of learning in the year before they start school.

If you’re a girl and you like to play sport…

$17 million will go towards “inspiring girls to play sport taking advantage of Australia hosting the FIBA Women’s Basketball World Cup in 2022 and the FIFA Women’s Soccer World Cup in 2023,” according to budget documents.

The money will also help women become coaches or officials, and encourage more Indigenous women to play sport.

If you’re a veteran…

$460.4 million has been set aside to help veterans access the support they need for their wellbeing.

$32.1 million will go towards delivering commemorative services like marking Anzac Day and maintaining war graves.

If you’re a tradie…

It’s good news for you, because infrastructure is getting the big bucks. The Government has spoken extensively before about “shovel-ready projects”, and they’ve already established a $110 billion pipeline of projects over 10 years.

The 2021 Budget commits an extra $15.2 billion on top of that, with this money expected to support more than 30,000 jobs. Here’s how much each state will get:

  • NSW: Extra $3.8 billion

  • Victoria: Extra $3.4 billion

  • Queensland: Extra $2 billion

  • Western Australia: Extra $1.6 billion

  • South Australia: Extra $3.4 billion

  • Tasmania: Extra $377.2 million

  • Northern Territory: Extra $401 million

  • ACT: Extra $186.2 million

If you want to buy a house…

The First Home Loan Deposit Scheme is being expanded by a further 10,000 spots in 2021-22. These New Home Guarantees will let more Aussies either build a new home or buy a newly-built house with a house deposit of as low as 5 per cent and will be made available from 1 July this year to 30 June 2022.

The Government has made it easier to dip into your super to buy a home, with an expansion of the First Home Super Saver Scheme allowing eligible first home buyers to take out up to $50,000 from their super towards their deposit.

And if you’re a single parent, the Government wants to give you a hand with home ownership: from 1 July, 10,000 places over four years will be available for eligible single parents with dependent children to build or buy a new home with a deposit of as low as 2 per cent.

If you’re building or renovating your home…

The HomeBuilder program’s six-month construction commencement window has been extended to 18 months, which will mean construction work can begin later this year and throughout 2022.

If you’re an immigrant…

The Government is maintaining the migration program planning level at 160,000 places in 2021-22.

This will reduce the underlying cash balance by $298.3 million across the forward estimates period.

If you’re an asylum seeker…

$464 million was provided over two years from 2020-21 to strengthen the onshore Immigration Detention Network, as well as extending use of the Christmas Island detention centre.

“This measure addresses ongoing capacity pressures across the IDN as a result of the impact of the COVID-19 pandemic on the ability to remove unlawful non-citizens from Australia,” the budget papers stated.

If you work in AI…

Over $124.1 million has been dedicated to artificial intelligence-related capabilities.

This money will go towards creating a National AI Centre; helping businesses work with the government to come up with AI-based solutions to national challenges; establishing an AI graduates program, attracting and training AI specialists through scholarships; and grants to support community and business projects in regional areas.

If you want to work in cybersecurity…

The Government has flagged this as a priority, with $43.8 million to expand the Cyber Security Skills Partnership Innovation Fund.

If you’re worried about national security…

A further $1.9 billion will be dedicated across 10 years to strengthening national security, law enforcement, and intelligence agencies.

That’s $1.3 billion to ASIO, $51.8 million to the Australian Criminal Intelligence Commission (ACIC). It’s also injecting $464.7 million towards detention centres.

“We also need to be prepared for a world that is less stable and more contested,” Frydenberg said.

If we need to go to war

The Government wants to be prepared. In an already-announced measure, $747 million will go towards upgrading four military training areas in the Northern Territory aimed at “promoting an open and peaceful Indo-Pacific”.

Security analysts have said that Darwin is shaping up to be a key strategic location in the Asia-Pacific region.

If you’re a farmer and export to China…

You’ll get a hand at cracking into other markets. $87.7 million will go towards the Agri-Business Expansion Initiative that helps farmers diversity their export markets.

If you live in regional Australia…

The Government wants to grow jobs where you are. The Budget contains a total of $909 million in funding towards regional economies, including diversifying farm exports, small-scale water and dam projects, greater internet connectivity, easing visa restrictions for agriculture, tourism and hospitality, helping farmers retain skilled workers, and fast-tracking farmer access to agriculture and veterinary chemicals.

If you work in tourism, aviation, arts or international education…

Your sector was hit hard by COVID-19, and these industries have been given a collective $1.2 billion to assist with recovery. Here’s what each sector will get:

  • Tourism: More than 800,000 half-price airfares will be made available to Aussies (660,000 of these have already been sold);

  • Aviation: A number of tourism support programs will be extended to maintain connectivity and help airports;

  • Arts: Nearly $300 million will go towards the creative industries to get new productions and festivals off the ground, keep thousands in jobs, and support 230 projects;

  • International Education: Non-university higher education providers will get funding for an additional 5,000 Commonwealth-supported short courses, and eligible private higher education and English-language course providers can get grants of up to $150,000.

If you care about climate change, or work in the energy sector

$215.4 million will be dedicated to supporting investment in “new dispatchable generation”.

Battery and microgrid projects will get $49.3 million, and $24.9 million will go towards ensuring new gas generators are hydrogen-ready.

The Government is also doubling down on its “gas-powered recovery”, with $58.6 million going towards key gas infrastructure projects.

Additionally, $1.2 billion will be spread across 10 years to invest in low-emissions technology, including hydrogen hubs, carbon capture use and storage, and soil carbon innovation.

The Government will spend $316.7 million on helping businesses and industries reduce their energy use and emissions.

If you’re crazy about renewable energy…

There’s little for you here – the Government has committed $1.6 billion to what it’s labelled “priority technologies”: clean hydrogen and energy storage.

If recycling is important to you…

$11 million will go towards strengthening the country’s recycling capabilities, and $67 million will be spent on reducing food waste going to landfill.

If you care about the ocean…

$100 million will go towards protecting sea life, restoring coastal ecosystems and strengthen management of the oceans. The money will be aimed at protecting species and creating jobs.

If you work in manufacturing…

The Government is continuing with a number of projects already underway, like the Modern Manufacturing Strategy, the Modern Manufacturing Initiative, and the Supply Chain Resilience Initiative.

If you make vaccines…

You’ll get a shot in the arm, with the Government saying they’re committed to developing national vaccine manufacturing capabilities like mRNA vaccines.

If you’re an innovative genius…

The Government is creating something called the “patent box”, which will tax patents created by the Aussie medical and biotechnology sectors at the concessional corporate tax rate of 17 per cent, which is “almost half the rate that applies to large companies,” according to Frydenberg.

If you live overseas, talented, and want to work in Australia…

The Government wants your services. A new Global Talent visa and Temporary Activity visa have been created to attract highly skilled workers to Australia

If you want shares in the company you work for…

The Government is making it easier for your employer to offer employee share schemes (ESS) by removing red tape around tax.

If you hate myGov…

Good news. $200.1 million has been set aside to overhaul the myGov system, with a further $301.8 million spent on enhancing the My Health Record system, which has been controversial in the past amid concerns about data privacy and security.

If you get really bad migraines…

A new treatment called Emgality will be listed on the PBS scheme for the treatment of chronic migraines. This will be available from 1 June this year.

If you’re a literal pest…

Bad news if you’re the khapra beetle or African swine fever: $414.5 million will go towards expunging pests, weeds, and strengthening border surveillance and controls.

If you host agricultural shows…

Agricultural showmen and women will get $4.3 million from this budget. This will go towards “the operational costs associated with their participation at agricultural shows in 2021-22, and to provide a moratorium on Showmen’s Guild fees for 2021.”

If you’re a game developer…

The Government wants to grow Australia’s eSports industry – so eligible game creators will get a refundable tax offset of 30 per cent.

What happens next?

Frydenberg has indicated that the chief goal is to get unemployment down to a figure that has a 4 in front of it. The jobless rate is currently 5.6 per cent.

When this happens, Australia can move onto phase two of recovery.

“Once Australia secures the recovery and unemployment is back to its pre-crisis levels or lower, our fiscal strategy will shift to the second phase and be focused on its medium-term objective of stabilising and reducing debt,” the budget documents state.

Find all of our Federal Budget 2021 coverage here, and get it delivered to your inbox via our newsletter here.

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