On 11 May 2021, Treasurer Josh Frydenberg handed down his second “pandemic budget” amidst a backdrop of continuing uncertainty. Acknowledging that the virus is a continuing threat to lives and livelihoods, this budget is again framed to prioritise jobs and investment.
The budget, handed down by Treasurer Josh Frydenberg on Tuesday night, revealed a deficit set to reach $161 billion this year – $52.7 billion lower than what was expected around six months ago.
Here are some of the 2021 Budget’s winners and losers.
An extra $1.9 billion will be spent on our vaccine strategy over the next five years, with the government also confirming it’s set aside a pool of money to invest in mRNA vaccine production in Australia.
Currently, mRNA vaccines can’t be made in Australia but after the official health advice that the preferred COVID-19 vaccine for people under 50 be Pfizer (mRNA), many called on the government to look at producing them locally.
The government is also chipping in another $1.5 billion for COVID-related health services like testing and contact tracing.
The aged care sector will get a $17.7 billion funding boost over four years.
The particulars of this spending package are vast and complex, but on a broad scale it will improve living conditions in aged care facilities, enable older Australians to stay at home for longer and will boost the training and number of care workers.
From July 1, 2022, people aged 60 and over will be able to use some of the proceeds from the sale of the family home to increase their superannuation. It was previously limited to people 65 and above.
Last year’s budget was criticised for its lack of specific focus on funding for women — while this year is a completely different story, with funding increased across multiple areas.
The government will spend $3.4 billion over the next five years to deliver a more women-focused budget.
About half of that will go to boosting childcare subsidies with a view to increasing workforce participation.
The Childcare Subsidy Scheme will come into effect in July 2022.
Under the changes, the annual $10,560 cap on households with an income of more than $189,390 will be abolished.
If you have one child in childcare, the subsidy stays at 65 per cent but if you have two or more, it’s 95 per cent for each kid.
The government estimates the changes will help around 250,000 families.
The rest of the money will be spent on initiatives such as domestic violence support services and medical research for conditions affecting women like endometriosis.
People with mental health issues
The government will spend $2.3 billion over four years to boost mental health services.
That figure includes $1.4 billion for mental health treatment, $298.1 million for suicide prevention initiatives – including a new suicide prevention office – and $248.6 million for early intervention strategies.
First home buyers
The government has committed to an extra 10,000 places for the First Home Loan Deposit scheme, which will see first home buyers only having to provide a five per cent deposit to secure a property.
If you’re an eligible single parent, that could drop as low as two per cent.
There is a catch though – you will eventually have to pay that back over the course of your loan.
Foreign students (and tourism and hospitality businesses)
Foreign students will be able to work more than the current maximum of 40 hours per fortnight if they are employed in the tourism or hospitality sectors.
Job seekers in some sectors
A half-a-billion-dollar extension of the JobTrainer program is expected to provide nearly 200,000 cheap or free training places in areas of skills need, including aged care and IT.
A new $1.5 billion injection into the Boosting Apprenticeship Commencements wage subsidy aims to help more women break into non-traditional trades.
More than $63 million over four years has also been pledged to fund an additional 2,700 places in Indigenous girls academies, aimed at helping them finish school enter the workforce.
Low- and middle-income earners
Up to 10 million people will receive a fatter tax return when they lodge their tax later this year, with the maximum “cashback” rate of $1080 for individuals.
How much you receive back depends on how much you earn. The initiative will cost the government $7.8 billion.
Employee share owners
Workers won’t be taxed on the shares they own in a company when they leave it. Employers will also be allowed to issue up to $30,000 worth of shares a year, up from $5000.
The government is pledging a massive cash-back scheme for every $350,000 worth of alcohol they ship out of local warehouses.
Under the program, eligible brewers and distillers will receive full remission of any excise they pay on alcohol up to a cap of $350,000 every financial year.
The move will primarily benefit small, locally run operations.
Aussie game developers are set to benefit from a Digital Games Tax Offset that will see production houses receive a 30 per cent refundable tax offset for expenditure from July 1, 2022.
The government has said it wants to help Australians to take their slice of the $250 billion global video game market.
From July 1 next year, Aussie companies that create medical or biotech products and patent them will be taxed at the very low rate of 17 per cent.
Called a “patent box”, the initiative is designed to inspire Aussie inventors to come up with the next bionic ear (the Cochlear implant is an Aussie invention) or cervical cancer vaccine (also Australian).
Normally these companies are taxed at the rate of 30 per cent.
As well as the support announced for particular industries like small brewers, video gaming and medical and biotech start-ups, the budget also has a few perks for other businesses.
Last year’s business write-off perks are being extended by another 12 months.
That means businesses with a turnover of up to $5 billion will be able to write off the full value of any eligible asset like a work vehicle or equipment they bought between last budget and June 30, 2023.
The extension also means any losses incurred up to June 2023 can be offset against prior profits made going back to the 2018-19 financial year.
Roads and rails (and the people who build them)
The federal government will add another $10 billion over 10 years to its budget for new roads, highway upgrades and construction of freight hubs. NSW will get the lion’s share, worth more than $3 billion.
International tourism – given the issues with the vaccine rollout and ongoing international outbreaks, the government’s now saying the border won’t open until at least mid-2022. That’s bad news for tourism operators who rely on international visitors.
Migration – With the international borders still closed until at least mid next year, our migration numbers are expected to keep going backwards. Migration will fall by a further 77,000 people between 2021-22 due to the border closure. The budget predicts that it’ll then increase to 235,000 in 2024-25, but as the last year’s proven those figures really are just estimates that could change amid the uncertainty of COVID-19.
New residents – one way the government is expecting to save a lot of money is by making “newly arrived residents” wait four years across the board for “most” welfare payments. The new rule will start on January 1, 2022 and is expected to save $671 million over five years.
Foreign aid – Foreign aid spending will decline by 10.5 per cent in 2021-22 then continue sliding by 4 per cent for the next three years after that.
Universities – Small-phased programs to fly international students into the country will start later this year with numbers to increase over 2022. But there’s no extra funding for the sector which has lost crucial revenue from international students. Course funding changes will also see domestic revenue decline.