Our Budget 2020 announcement summary

The Budget was “all about jobs” (including creating new jobs and getting the unemployed back into work again) and getting the economy moving again.

Some great news – tax cuts to individual tax rates.

Bring forward of the second stage of the personal tax cuts by 2 years to 1 July 2020, lifting the 19% threshold from $37,000 to $45,000, and lifting the 32.5% threshold from $90,000 to $120,000. At the same time, the low and middle-income tax offset (LMITO) will be retained for 2020-21.

 

Extra tax taken out so far this year – will add some extra fat to your tax refunds next year.

Loss carry-back: The Government will allow eligible companies to carry-back tax losses from the 2019-20, 2020-21 or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years

Asset write-off: For eligible capital assets acquired from 7:30 pm AEDT on 6 October 2020 and first used or installed by 30 June 2022, over 99% of businesses will be able to write off the full value of any eligible asset they purchase for their business. This will be available for small, medium and larger businesses with a turnover of up to $5 billion until June 2022.

 

Super reporting even easier

YourSuper portal – the ATO will develop systems so that new employees will be able to select a super product from a table of MySuper products through the YourSuper portal; Great more people knowing more about their super

 

Easier to not lose your super

Easier to choose a better fund

Easier to realise your fund performance

 

ATO funding: The Government will provide $15.1 million to the ATO to target serious and organised crime in the tax and super systems.

 

JobMaker hiring credit: The Government announced a new JobMaker hiring credit to encourage businesses to hire younger Australians. The JobMaker hiring credit will be payable for up to 12 months and immediately available to employers who hire those on JobSeeker aged 16-35. It will be paid at the rate of $200 per week for those aged under 30, and $100 per week for those aged between 30-35. New hires must work for at least 20 hours a week. All businesses, other than the major banks, will be eligible

 

The Government has committed to creating 100,000 new apprenticeships

Targeting youth employment and JOBMaker

 

Age Pensioners will receive an additional $250 payment from November 2020 and a further $250 payment from early 202

 

The Budget also includes a package of measures to create jobs and back regional Australia’s economic recovery:  help drought-affected farmers, visitors back to the regions, helping exporters

▪ $2 billion in concessional loans to help farmers overcome the drought; ▪ $350 million to support regional tourism to attract domestic visitors back to the regions and a further round of the Building Better Regions Fund; and ▪ $317 million for Australian exporters to continue to access global supply chains

 

BUSINESS TAXATION [1074] Small business tax concessions extended to businesses in $10m-$50m range The Budget confirmed the Government’s announcement on 2 October 2020 that a range of tax concessions currently available to small businesses (aggregated annual turnover under $10 million) will be made available to medium-sized businesses, ie businesses with an aggregated annual turnover of $10 million or more but less than $50 million. The extension of these concessions to medium businesses will be delivered in 3 phases: ▪ From 1 July 2020, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure; ▪ From 1 April 2021, eligible businesses will be exempt from the 47% FBT on car parking and multiple work-related portable electronic devices, such as phones or laptops, provided to employees. (Note that an FBT exemption for retraining redeployed employees will also apply from 2 October 2020: see para [1080] of this Bulletin); ▪ From 1 July 2021: ▪ eligible businesses will be able to access the simplified trading stock rules, remit PAYG instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods; ▪ The time limit for the ATO to amend income tax assessments will be reduced from 4 to 2 years for eligible business for income years starting from 1 July 2021, and ▪ the Commissioner’s power to create a simplified accounting method determination for GST purposes will be expanded to apply to businesses below the $50m aggregated annual turnover threshold. The eligibility turnover thresholds for other small business tax concessions will remain at their current levels.

 

Outright deduction of capital assets until 30 June 2022 for most businesses continued

 

Loss carry-back from 2019-20, 2020-21 and 2021-22 income years

 

JobMaker Hiring Credit The Budget announced that the Government will provide $4 billion over 3 years from 2020-21 to accelerate employment growth by supporting organisations to take on additional employees through a hiring credit. The JobMaker Hiring Credit will be available to eligible employers over 12 months from 7 October 2020 for each additional new job they create for an eligible employee. Eligible employers who can demonstrate that the new employee will increase overall employee headcount and payroll will receive $200 per week if they hire an eligible employee aged 16 to 29 years or $100 per week if they hire an eligible employee aged 30 to 35 years. The JobMaker Hiring Credit will be available for up to 12 months from the date of employment of the eligible employee with a maximum amount of $10,400 per additional new position created. To be eligible, the employee will need to have worked for a minimum of 20 hours per week, averaged over a quarter, and received the JobSeeker Payment, Youth Allowance (other) or Parenting Payment for at least one month out of the three months prior to when they are hired. New jobs created until 6 October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created. To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous 3 months at the time of hiring. The JobMaker Hiring Credit will be claimed quarterly in arrears by the employer from the ATO from 1 February 2021. Employers will need to report quarterly that they meet the eligibility criteria. To attract the JobMaker Hiring Credit, the employee must be in an additional job created from 7 October 2020. To demonstrate that the job is additional, specific criteria must be met. The “additionality criteria” require that there is an increase in: ▪ the business’ total employee headcount (minimum of one additional employee) from the reference date of 30 September 2020; and ▪ the payroll of the business for the reporting period, as compared to the 3 months to 30 September 2020.

 

Employer eligibility Employers are eligible to receive the JobMaker Hiring Credit if they: ▪ have an ABN; ▪ are up to date with tax lodgment obligations; ▪ are registered for PAYG withholding; ▪ are reporting through Single Touch Payroll (STP); ▪ meet the “additionality criteria”; ▪ are claiming in respect of an eligible employee; and ▪ have kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of. Newly established businesses Newly established businesses and businesses with no employees at the reference date of 30 September 2020 are able to claim the JobMaker Hiring Credit where they meet the criteria. The minimum baseline headcount is one, so employers who had no employees at 30 September 2020 or who were created after this reference date will not be eligible for the first employee hired, but will be eligible for the second and subsequent eligible hires.

 

SOCIAL SECURITY MEASURES [1096] $250 cash payments for income support recipients [1097] Deeming rates – no change [1098] Youth Allowance and ABSTUDY eligibility: incentives re seasonal work [1099] Youth Allowance and ABSTUDY independence test [1100] Cashless Debit Card – ongoing funding [1101] Paid Parental Leave – alternative work test [1102] Totally and Permanently Incapacitated Veterans – rent assistance