Budget 2021: Winners and losers

Treasurer Josh Frydenberg has unveiled this year's Budget with a massive focus on closing the gap between men and women and boosting jobs.

Here’s everything you need to know about how this Budget will affect you.

Winners

Women in work:

The Government wants to help women enter the workforce whether it be in a trade or a STEM field.

“We will help more women break into non-traditional trades, with training support for 5,000 places,” Frydenberg said.

“We will provide 2,700 places in Indigenous girls academies to help them finish school and enter the workforce.”

Frydenberg said the Government is partnering with the industry to help boost women studying STEM subjects (i.e. Science, Technology, Engineering and Maths).

And to help those women have the flexibility to choose to return to the workforce, the Government has pledged $1.7 billion to childcare.

“Childcare is an important driver of higher workforce participation and women’s economic security,” Frydenberg said.

“This will increase the affordability of childcare for low- and middle-income families. 250,000 families will be better off by an average of $2,200 each year.”

The Government in total has promised $3.4 billion in investment towards “promoting the values of respect, dignity, choice, equality of opportunity and justice” for women.

Single parents:

The Government announced the Family Home Guarantee prior to the Budget’s release. It said the guarantee will allow 10,000 single parents to purchase a home with a 2 per cent deposit.

The Government will guarantee the remaining 18 per cent, Frydenberg said.

If you earn under $125,000:

The Low and Middle Income Tax Offset (LMITO) has been extended for another year, meaning Aussies will be $1,080 better off at tax time.

This will cost the Government around $7.8 billion in 2021-22.

The extension of the LMITO is on top of $25.1 billion in further tax cuts announced in last year’s Budget, but set to come into effect this financial year.

Around 10.2 million Aussies will benefit from retaining the offset in 2021-22, which is worth up to $1,080 for individuals or $2,160 for couples.

With the additional year of the LMITO, the Government’s Personal Income Tax Plan will deliver total tax cuts of up to $7,020 for individuals and up to $14,040 for couples, in total from 2018 to 2022.

“Over 10 million low- and middle-income earners will benefit from a new and additional tax cut,” Frydenberg said.

“More of their money in their pockets to spend across the economy, creating jobs.”

Farmers:

If you’re an Aussie farmer, you can continue to claim the full value of assets you buy come tax time until 2023. Frydenberg said extending this measure will help boost the private sector.

“A sustainable recovery requires a strong private sector. Our record investment incentives are filling the order books of the nation,” he said.

“Over 99 per cent of businesses, employing over 11 million workers, can write off the full value of any eligible asset they purchase. This has seen their spending on machinery and equipment increase at the fastest rate in nearly seven years.”

Under the extension, businesses can write off the full value of anything they purchase for work purposes be it a new ute, harvesting equipment or new printers.

First home buyers:

The First Home Buyers Scheme is being extended to another 10,000 Aussies who will be able to buy a home with just a 5 per cent deposit.

Additionally, the Government is allowing Aussies to take more money out of their super to achieve home ownership.

The amount that can be released under the First Home Super Saving Scheme has been increased from $30,000 to $50,000.

• Watch: Treasurer Josh Frydenberg unveils tax changes in 2021 Federal Budget

Small business owners:

A number of tax incentives have been included in this year’s Budget for small and medium (SME) businesses, particularly those who have been hit hard by COVID.

The corporate tax rate for SME’s will drop from 30 per cent to 25 per cent come July 1.

Frydenberg said the small business loan scheme will also be extended after supporting over 45,000 businesses access low-cost financing last year.

Additionally, to help SME’s put a pause on any debt recovery action launched by the tax man the Government is broadening the scope of the Administrative Appeals Tribunal.

The Government said it will ensure that an “independent umpire” will stand between the small business and ATO to help resolve disputes.

“Small and family businesses are the engine room of our economy. They are at the heart of every local community,” Frydenberg said.

“As they strive to recover, we need the tax system to work for them, not against them.”

Builders:

A massive $15 billion will be allocated to building and expanding roads and railway lines across the nation.

For those working in the industry this could be up to a decade of work. The Government said these measures are expected to support close to 20,000 jobs.

Retirees:

Aussie retirees with be given more flexibility when it comes to their superannuation. The changes are partly driven to help close the superannuation gap between men and women.

The Government is removing the current $450 per month minimum income threshold for the superannuation guarantee.

This means those who earn under that amount will now receive superannuation contributions, whereas before they didn’t.

Frydenberg said this will help 200,000 women retire with more money as more women work part time while they raise children than men, which has traditionally seen them miss out of super contributions.

Additionally, those aged over 60 will now be allowed to contribute up to $300,000 into their superannuation if they downsize their home.

Previously, Australians needed to be 65 or older to make this contribution.

Frydenberg said this measure will also help younger families enter the housing market as older Australians will be more willing to put their home on the market.

The pension loan scheme is also being extended and provides a lump sum of around $12,000 for singles and $18,000 for couples to ensure a dignified retirement.

“Our plan will also make it easier for Australians to prepare for retirement and to be more secure once in retirement,” Frydenberg said.

“Under the Coalition, Australian seniors will always have more control over their money.”

Regional Aussies:

The Government has pledged $371 million in a new biosecurity package which is aimed at protecting agricultural and regional communities.

Frydenberg said this will help strengthen border screening control and improve Australia’s ability to fight an outbreak.

“Australia’s biosecurity system protects more than $50 billion in agricultural exports and 1.6 million jobs from threats like African Swine Fever,” Frydenberg said.

“This Budget will strengthen border screening controls and improve our ability to fight an outbreak.”

Agricultural showmen and women:

This year’s Budget is pledging $4.3 million in support of agricultural showmen and women to support the operational costs associated with their participation in agricultural shows and provide a moratorium on Showmen’s Guild fees for 2021.

Beer makers and drinkers:

Distilleries and breweries will benefit from smaller excise taxes and Aussies are hoping the decrease costs will be passed on to consumers.

Around 1,000 distillers and brewers will benefit as they will no longer have to pay excise tax on the first $350,000 worth or alcohol that leaves the warehouse for consumption.

Health services:

$1.9 billion has been promised to go towards the COVID vaccine rollout which has hit a number of speed bumps so far.

An additional $1.5 billion will go towards COVID-related health services, including for testing, tracing, respiratory clinics and telehealth services.

“In total the Morrison Government has committed $20 billion to the vaccine rollout and to strengthen our health system in response to COVID,” Frydenberg said.

It’s not all about COVID though, with funding also announced for new medicines to treat breast cancer, lung cancer, severe osteoporosis and asthma.

There is also a focus on women’s health with the Government providing funding for endometriosis, research into pre-term birth and genetic testing for pregnant women.

“The Government is committed to ensuring Australians can access quality medical services no matter where they live,” Frydenberg said.

“That is why this Budget will provide higher incentives to rural and regional GPs for bulk billed services, helping to keep more doctors in the regions.”

If you’re an apprentice:

The Budget has doubled the Government’s commitment to the JobTrainer fund to $2.7 billion.

It will now support over 450,000 new training places to upskill job seekers and young people.

Educators:

Whether you teach preschool kids or university students the Government has included reforms and funding to boost participation.

$2 billion will go towards funding preschools and $19 billion for universities.

“Preschool is a vital time in a child’s development and prepares them for the educational journey ahead,” Frydenberg said.

CEOS and executives:

Dubbed as a way to help companies “attract and retain talent” this Budget has removed the end of employment taxing point for Employee Share Schemes (ESS).

An ESS grants an employee a certain amount of shares in the company they work for to encourage them to want the company to succeed.

They are usually awarded to CEOs and executives as part of their employment package.

ESS can be given to any employee, but is usually the case with those who work high up and can result in massive pay days.

Formerly, once a worker left their position they would be taxed on the worth of those shares from the date they left the job, but now they will be able to defer paying that tax.

Additionally, the Government is also introducing regulatory changes to reduce red tape and make it easier for companies to offer ESS.

The Budget removes disclosure requirements and increases the value of shares that can be issued without disclosure from $5,000 to $30,000 per employee per year.

“These reforms will make it easier for companies to offer ESS to employees giving more Australians a share in the economic value they create through their hard work and ingenuity,” Frydenberg said.

The video game industry:

In a bid to encourage video game developers to come to Australia, the Government has introduced the Digital Games Tax Offset (GDTO) to promote the growth of the industry in Australia.

“Investing in this dynamic and innovative industry will support Australia taking a greater share of the $250 billion global games development market,” Frydenberg said.

From 1 July 2022, the DGTO will provide eligible game developers with a 30 per cent refundable tax offset for qualifying Australian games expenditure.

The maximum DGTO a developer will be able to claim in each year is $20 million.

The video game cannot have gambling elements and the developers must have spent at least $500,000 in developing the game.

The Government believes this will deliver $18.8 million in support for the Australian video game industry.

Domestic tourism:

This Budget is encouraging Aussies to travel domestically with international borders expected to remain closed until next year.

But it’s good news for domestic tourism with the Government delivering a $1.2 billion package for the aviation and tourism sectors to help them recover from the COVID lockdowns.

$274.5 million is going towards the expansion and extension of support packages supporting Aussie businesses like travel agents, zoos and aquariums.

Cinemas:

The Government has pledged $20 million to support independent cinemas across the country to help keep their doors open and Aussie’s in jobs.

Losers

The environment:

Vast gas reserves in the North Bowen and Galilee Basins have been unlocked with the Government allowing gas mining to begin.

While the Government said this is to encourage the creation of hydrogen-ready gas plants to move away from coal, the act of removing the gas from the Earth can be extremely damaging to the environment.

Additionally, considering the vast amounts of money being invested into other industries, this Budget only pledges $100 million to protect Australian oceans.

On top of that, Frydenberg refused to commit Australia to net zero carbon emissions by 2050. Instead, he said: “Our goal is to get there as soon as we possibly can, preferably by 2050”.

Asylum seekers:

The Government has pledged an additional $464.7 million to bolstering Australia’s domestic detention capabilities as there are fewer asylum seekers being kept in offshore facilities.

Anyone wanting to buy a car:

Due to the asset write off extension that was in the ‘Winners’ section for farmers, it’s not likely to do a whole lot to drive down the surging price of used cars.

Due to COVID-induced lockdowns, supply chains have been impacted which has halted the production of microchips. This in turn means the production of new vehicles has been impacted.

As a result, used cars have never been more in demand and with tradies being able to write-off the complete cost of a new car used for work, the prices of used cars are sure to only push higher.

China:

While not naming names, Frydenberg dropped a few hints that the Government will be helping Aussie businesses reduce their reliance on China as tensions continue to escalate between the nations.

The Budget has put $1.5 billion towards building up Australia’s manufacturing capability to bring the production of many products back to Australian shores.

Additionally, $107.2 million will be put towards the new Supply Chain Resilience Initiative to help fix gaps in Australia’s supply chains to support Aussie manufacturers.

“A resilient Australia requires diverse and reliable supply chains. That is why we are providing additional support for Australian manufacturers of critical products,” he said.

“And more funding to help small businesses and farmers expand and diversify their export markets.”

The Budget lays out a plan to densify Australia’s export market, with a goal of signing more free-trade agreements to expand Australia’s two-way trade to reach 90 per cent coverage.

The Government will invest 87.7 million to help farmers “diversify and increase their exports”.

Aussie industries like wine, seafood and farming have been heavily impacted by increased tension between Australia and China and it seems the Treasurer is focused on pulling further away from the nation’s biggest trading partner.

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