Federal Budget Summary

The Federal Budget released on Tuesday night (6 October) was all about encouraging business and personal spending to support employment, particularly as the JobKeeper measures start to unwind. Together with increased Government spending in key areas, they hope it can minimise job losses and promote an economic recovery.

Instant Asset Write Off

$150,000 threshold has been extended and expanded, but it still does not apply to buildings or high value cars.

The Government has announced that it will amend the tax law so that businesses with aggregated annual turnover of less than $5 billion will be able to deduct the full cost of eligible capital assets in the year they are first used.

The $150,000 instant write off rules already existed. Essentially the Government have just extended the eligible period of investment from 31 December 2020 to 30 June 2022 and allowed a larger range of businesses (larger businesses) to access the concessions. For most businesses, there is no real change here.

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. Eligible employers will also need to demonstrate that the new employee will increase overall employee headcount and payroll.

All businesses, other than the major banks, will be eligible.