Australian Federal Budget 2020/1

We certainly live in interesting times:

Don’t think we had much of a choice (a pandemic budget) but to borrow and spend big. Idealism eventually runs out of money and we as a country need to generate income for our future ideals.

This budget (like no other) feels like it is a fiscally live on our feet instead of living on our fiscal knees. In a way it’s a huge gamble to a vaccine arriving but if it doesn’t Australians learning to live (and earn) with the virus (no matter what the outcomes) and for that there has to be money in the economy. This budget has delivered that at the expense of a huge government debt. What is a trillion dollars?

$1,000,000,000,000 or $40,000 owed by every single Australian. Is that a lot?

My thoughts are no as we have a lot of assets and interest rates are negligible but we will need a new vision to attack debt (not just fluff with it) post covid. In due course, we should attack debt – because whoever controls the debt controls the world and it’s only a matter of time until the next crisis needing funding begins.

The budget is all about employing:

I often say its generation X (approx. aged 37 to 55) with and X on their back and that trend will continue in earnest as the employment subsidies are targeting youth:

Businesses that hire people who have been on JobSeeker, Youth Allowance or the Parenting Payment for at least one of the previous three months will get $200 a week for 12 months if their new staff member is 16-29 years old and $100 if they are between 30 and 35.

The government will also spend $1.2 billion to subsidise up to 50 per cent of an apprentice’s wages for eligible businesses up to a cap of $7000 a quarter until September 30 next year. There are 100,000 places in the scheme.

So if you are Generation X our book “The Man With a Plan” (self-employment is the answer) is of particular help and for you to help find a way through this period (a limited number) we will mail it to you for free – email sje@ciatax.com.au

The budget is all about tax cuts:

To get us (in work) spending – The upper limit of the 19 per cent personal income tax bracket will rise from $37,000 to $45,000 and the threshold for the 37 per cent tax rate rises to $120,000 from $90,000, Combined, the tax cuts will deliver relief of $42 a fortnight for an individual earning $85,000 a year and about $99 for individuals earning $140,000.

The low-income tax offset will increase from $445 to $700. The increase will be withdrawn at a rate of 5¢ per dollar between taxable incomes of $37,500 and $45,000. The offset will then be withdrawn at a rate of 1.5¢ per dollar between taxable incomes of $45,000 and $66,667.

Under the low- and middle-income tax offset, taxpayers with taxable incomes between $45,000 and $90,000 will be eligible for the maximum offset of $1080 then phasing out to $120,000.

Businesses (under $5b) are also encouraged to spend:

The investment allowance will enable almost every company in the Australia to immediately write off in full any eligible depreciable asset, with no limit on value.

Businesses can write off any losses incurred until June 2022 against profits made on or after 2018-19, before the coronavirus pandemic struck.

Well that’s the 2020/1 highlights and there are plenty of other lesser budgetary gems around superannuation, Centrelink, R&D amongst other industry specific stimulus’s that can all be found here: https://budget.gov.au/index.htm