The 2021-22 Federal Budget confirms Australia’s remarkable economic and fiscal turnaround, with the Government laying the policy groundwork for businesses to take the wheel in driving the economic recovery.
“Australia is coming back; in the face of a once-in-a-century pandemic, the Australian spirit has shone through,” Treasurer Josh Frydenberg said in his Budget Speech, adding that businesses have kept the economy moving.
The Budget includes measures to shore up Australia’s workforce, develop home-grown skills, and delivers historic funding boosts to the aged care and mental health sectors.
It aims to drive Australia’s unemployment rate below 5 per cent, while forecasting Australia’s GDP growth to reach 4.25 per cent next financial year.
The Budget also includes a range of tax breaks designed to drive business investment outside the mining sector to 12.5 per cent by 2022-23, with a range of initiatives included to encourage investment in medical and biotech technologies through a patent box.
Here’s what the Federal Budget means for WA businesses:
Boosting skills with apprentices, trainees
The successful Boosting Apprenticeship Commencement program – a 50 per cent wage subsidy to help employers take on apprentices and trainees – has been extended until March 31, 2022.
The Government is also extending the JobTrainer program until December 31, 2022, providing free or low-fee courses to equip young people to work in areas of skills shortage such as aged care, disability care, child care and IT.
Tax breaks for SMEs
The Budget includes $16 billion in tax cuts for small and medium-sized businesses by 2023-24. This includes reducing the tax rate for SMEs from 30 per cent to 25 per cent from July 1, 2021.
To boost business investment, the Budget enables businesses to write off the full value of eligible assets purchased for an additional year until June 30, 2023. For the same period, refundable tax offsets for losses “carried back” to liability in earlier years can be claimed.
The Government has sought to address key COVID-related workforce challenges, committing $1.7 billion to improve childcare affordability in a boost for women seeking to return to work.
The Budget earmarks an increase in the Child Care Subsidy from July 2022 for families with more than one child aged under six in care, while also removing the annual subsidy cap of $10,560 per child for families with a combined income of more than $189,390.
Historic funding for aged care, mental health
The Budget provides a historic $17.7 billion commitment to aged care to improve skills and wages in the sector and support the viability of private residential facilities.
It also commits $2.3 billion to mental health services, with more than half allocated to treatment centres and suicide prevention programs in response to increased demand as a result of the pandemic and natural disasters.
CCIWA Chief Economist Aaron Morey said the Government’s initiatives to confront key workforce issues were particularly welcome in WA, where skills shortages are the State’s biggest barrier to growth, but warned they were unlikely to fully address the issue.
“It remains vital that all levels of government cooperate to help businesses get the skills they need, which will require access to overseas talent,” he said.
“Significant policy reform should still be pursued at the Federal level, including tax reform, further measures to enable women to re-enter the workforce after having children, and improvements to Australia’s system of industrial relations.”
Read CCIWA’s media statement in response to the Federal Budget.