As the 2020-21 budget day looms, we’ve put together a list of everything you need to know before the big day.
Budget 2020: When is it?
Tuesday 6 October, 7.30pm.
Wait, isn’t the budget normally in May? Why was it moved?
The government was due to deliver the 2020-21 federal budget on 12 May, but postponed it because of the coronavirus pandemic.
“The idea that you can actually put together any sort of forecast around the economy at this time is simply not sensible,” Prime Minister Scott Morrison said at the time.
More on this topic: Yahoo Finance’s coverage of the 2020 Federal Budget
Budget 2020: What could it mean for your taxes?
Budget 2020: What could it mean for jobs?
Budget 2020: Can we expect a Budget Day rate cut?
A cheat sheet for reading budget papers
There are usually four separate budget papers, not to mention related materials such as the budget speech, overviews, ministerial statements, appropriation bills and much more split up over around 600 pages.
For an easy summary of the main policy changes, you can listen to the Treasurer’s budget speech on budget night, or read the speech transcript on the budget website.
To quickly find the numbers for a budget deficit you need to look in budget paper No. 1: Budget Strategy and Outlook, “Statement 1: Budget Overview, Table 1 – Budget Aggregates”.
The other three budget papers contain more of the nitty gritty detail about the budget.
Budget Paper No. 2: Budget Measures contains the fine details of revenue and spending.
Budget Paper No. 3: Federal Financial Relations gives an overview of payments from the commonwealth government to the state and territory governments.
Budget Paper No. 4: Agency Resourcing gives technical details of budget resource management, including financial resources and staff resources.
How will coronavirus affect Budget 2020?
“The coronavirus crisis has hit our economy hard, and it’s hit our budget hard,” Australia’s Finance Minister Mathias Cormann told CNBC in July.
“We’ve had to make policy decisions with a fiscal impact of A$56 billion, and on top of that, there will be the impact of the economic hit on revenue and expenditure across the board,” he added.
Can we expect the budget to show a deficit?
The government’s July forecast showed the budget is expected to reveal a total deficit of around $281.4 billion, which includes $85.8 billion for the 2019-20 financial year, and $184.5 billion for the 2020-21 financial year, in what will be the highest budget deficit since World War II.
What else can we expect to see in Budget 2020?
Job generation: On Thursday last week, Federal Treasurer Josh Frydenberg announced a “revised fiscal strategy” which will see the Coalition’s focus on achieving a budget surplus take a backseat and instead job generation will step into the spotlight as the government’s new key goal.
We don’t know quite what that will look like but what is clear is the federal government is planning to pump money into creating jobs and reducing unemployment.
Income tax cuts: The 2020 budget also looks likely to hand out billions in fast-tracked income tax cuts in effort to pull Australia’s economy out of its deepest recession since 1930. The Coalition locked in three stages of income tax cuts, the first round last year gave average income earners around $1,080 in tax relief.
Stage two, which was originally scheduled for 2022 and would cut taxes for people earning more than $90,000 a year as well as raising the threshold on the lowest tax rate. This stage is expected to be brought forward in effort to kickstart the economy.
Cash boost for pensioners: Social Services Minister Anne Ruston revealed that Aussie pensioners would score a cash boost in the upcoming budget, although she did not specify exactly how much they would receive. "Further support around our pensions is something that is contained in the budget," Ruston told the Sydney Morning Herald.
Childcare support: The Federal Government has pledged a further $305 million towards childcare, largely targeted at Victoria as the state battles its second wave. The support package would see the activity test, which determines how many hours of subsidised care parents receive, relaxed until 4 April next year.
It also includes a fee freeze for Victorian families until 31 January, and a continuation of the employment guarantee.
Support for the tourism industry: Travel and tourism were battered by closed borders and lockdown restrictions, so we could see some support here. The Australian Federation of Travel Agents made a submission calling for several initiatives, like cash grants and establishing travel bubbles.
The Caravan Industry Association also called for rebates for RVs, while the Accommodation Association called for a $1,000 per room monthly payment to offset fixed costs.
Extension of HomeBuilder scheme: You might see the HomeBuilder scheme extended, with major industry groups calling for an extension as the construction sector continues to be decimated by Covid-19.
Currently, the $688 million HomeBuilder scheme provides singles earning up to $125,000 and couples earning up to $200,000 per year a grant of $25,000 to help them build or renovate a home.
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