BUDGET 2020 - THE ROAD TO RECOVERY
In the wake of the global coronavirus crisis and its impact on Australia, we have worked to protect people's health and to cushion the blow on our economy and jobs.
We have worked to boost resources for our health system and we have provided unprecedented fiscal support for our economy, for business, to save jobs and to support those Australians who lost their job as a result of this pandemic.
We were able to do what we did from a position of comparative strength because of the work we did in our first six budgets to strengthen the economy, to create more jobs and to repair the Budget.
This budget the next instalment of our plan to maximise the strength of our economic and jobs recovery moving forward.
Our Economic Recovery Plan for Australia will create jobs.
Our plan will guarantee the essential services Australians rely on.
Our plan will rebuild our economy and secure Australia’s future.
Our plan will grow the economy and guarantee the essential services Australians rely on. Our plan will see Australia a stronger nation.
Since the onset of the COVID-19 pandemic, the Government has provided $257 billion in direct economic support to cushion the blow and strengthen the recovery.
The 2020-21 Budget commits a further $98 billion including, $25 billion in direct COVID-19 response measures and $74 billion in new measures to create jobs.
Budget at a Glance
Lower taxes for hard-working Australians
In this Budget, the Government is delivering an additional $17.8 billion in personal income tax relief to support the economic recovery, including an additional $12.5 billion over the next 12 months. It builds on the $8.1 billion in tax relief that will be delivered for the 2020‑21 income year under the already legislated Personal Income Tax Plan.
Under the Government's changes, individuals will benefit from bringing forward the tax cuts in Stage 2 of its Plan, as well as a one-off additional benefit from the low- and middle-income tax offset in 2020-21.
From 1 July 2020:
- the low income tax offset will increase from $445 to $700;
- the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000; and
- the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.
The Government will also provide additional targeted support to low- and middle-income Australians. In 2020‑21, low-and middle-income earners will receive a one-off additional benefit of up to $1,080 from the low and middle income tax offset (LMITO).
The LMITO was to be removed with the commencement of Stage two, but the one‑off additional benefit in 2020-21 will provide support to households and stimulus to the economy.
Together, bringing forward Stage two and providing the additional LMITO means more than 11 million Australian taxpayers will get a tax cut, with effect from 1 July this year, providing them with more money to spend on what matters to them. As they spend their tax cuts this will help local businesses to keep their doors open and hire more staff.
More than 7 million individuals are expected to receive tax relief of $2,000 or more for the 2020-21 income year compared with 2017-18 tax settings. Low and middle income tax payers will receive relief of up to $2,745 for singles and $5,490 for dual income families.
JobMaker Hiring Credit
The Government’s new JobMaker Hiring Credit will help to accelerate growth in employment during the recovery by giving businesses incentives to take on additional employees that are young job seekers aged 16 to 35 years old. The JobMaker Hiring Credit is a key part of the Government’s JobMaker Plan to boost Australia’s economic recovery.
The JobMaker Hiring Credit is estimated to support around 450,000 positions for young people and cost $4 billion from 2020-21 to 2022‑23.
From tomorrow, eligible employers will be able to claim $200 a week for each eligible 16- to 29-year-old they hire, for up to a year. They'll be able to claim $100 a week for putting on people aged 30 to 35.
To be eligible, employers will need to demonstrate an increase in overall employee headcount and payroll for each additional new position created.
Building our Capability
The Budget invests $1.5 billion in our Modern Manufacturing Strategy – ensuring we have an internationally competitive and resilient manufacturing sector, and in the process create more high value jobs. We are also helping to secure our future by providing:
- an additional $2 billion through the Research and Development Tax Incentive
- $1 billion for new research funding for our universities
- $1.9 billion in new funding to support low emissions and renewable technologies
JobTrainer to Upskill and Reskill Australians
Supporting Business and Investment
To support new investment and increase business cash flow, the Government is providing a temporary tax incentive, which will be available to around 3.5 million businesses (over 99 percent of businesses) that employ around 11.5 million workers.
It will unlock investment, expand the productive capacity of the nation and create tens of thousands of jobs. Small businesses will buy, sell, deliver, install, and service these purchases.
The incentive will apply to around $200 billion worth of investment, including 80 percent of investment in depreciable assets by non-mining businesses. From 7:30 pm (AEDT) on 6 October 2020 until 30 June 2022, businesses with turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed. The cost of improvements to existing eligible depreciable assets made during this period can also be fully deducted.
The Government will also allow companies with turnover up to $5 billion to offset losses against previous profits on which tax has been paid, to generate a refund. Loss carry-back will be available to around 1 million companies that employ up to 8.8 million workers. Losses incurred up to 2021‑22 can be carried back against profits made in or after 2018‑19. Eligible companies may elect to receive a tax refund when they lodge their 2020‑21 and 2021‑22 tax returns.
The Government is also providing $105 million in tax relief to expand access to a range of small business tax concessions by lifting the aggregated annual turnover threshold for these concessions. Businesses with an aggregated annual turnover between $10 million and $50 million will, for the first time, be able to access up to ten small business tax concessions.
Protecting our Environment
The Government is investing $47.4 million to protect our oceans and restore their health and is committing $29.1 million to reduce the risk of chemical contamination on Commonwealth land.
The Government will invest $249.6 million over four years to modernise recycling infrastructure, reduce waste, and recycle more within Australia.
The Budget also sets out measures that demonstrate how the Government is reducing emissions through technology, not taxes, including:
- $1.4 billion over 10 years for the Australian Renewable Energy Agency to support the Government’s Technology Investment Roadmap, by accelerating the development of new and emerging technologies to reduce emissions;
- $70.2 million over five years to activate Australia’s first regional hydrogen export hub and facilitate research collaborations and international supply chain studies to boost Australia’s hydrogen industry;
- $95.4 million for a Technology Co-Investment Fund to implement recommendations from the King Review to support businesses in the manufacturing, industrial, transport and land sectors to invest in low emissions technologies to unlock energy and emissions savings and create jobs;
- $50 million investment in the Carbon Capture Use and Storage Development Fund to pilot carbon capture projects that will help dramatically cut emissions from large industrial facilities;
- $74.5 million over four years to enable Australian consumers and businesses to adopt future fuel and vehicle technologies in Australia, including hydrogen, electric, and bio-fuelled vehicles; and
- $45.2 million for the Government to progress reforms to make it easier and cheaper for business to participate in the Emissions Reduction Fund, and to support investment in offshore clean energy generation and transmission.
Preventing, detecting, and treating COVID-19 and a World-Class Health System
In this Budget, the Government is investing $4.9 billion for a range of health measures ensuring Australians continue to receive the medical care and support they need throughout the pandemic. The flexible and scalable response enables the health system to respond, protecting all Australians.
The Government is committing record funding to health, with total spending of $93.8 billion in 2020‑21, an increase of almost 43 percent since 2014‑15. This will ensure Australians can continue to access the essential GP, pharmaceutical, and hospital services they rely on.
Ensuring Quality Care for Vulnerable People
The Government is progressing reforms to deliver enhanced access, quality, and safety in aged care.
This includes $1.6 billion for an additional 23,000 home care packages. The Government is providing an additional $3.9 billion to the NDIS, to ensure that NDIS participants receive the care and support they need.
The Government is guaranteeing that National Disability Insurance Scheme (NDIS) participants receive the essential support they need.
The Government is providing a further $3.9 billion to the NDIS, to ensure Australians eligible for the NDIS have access to the supports they need now and into the future.
The Government is providing $220 million to support the delivery of critical front line services for families.
This includes $133 million towards family and child support programs and $87.3 million towards Family Law and Family Relationship Services.
Building on previous commitments to keep women and children safe and ensuring access to justice, we will provide the Family and Federal Circuit Courts with an additional $10.2 million to manage the impacts of COVID-19.
Defence of Australia's National Security Interests
The 2020 Defence Strategic Update and 2020 Force Structure Plan is a 10 year funding model with a 20 year outlook and continues to provide Defence and defence industry with the planning certainty required to support the ongoing development and delivery of critical Defence capability and Australian jobs.
This 10 year model provides Defence, including the Australian Signals Directorate, with funding of $575 billion over the decade to 2029-30. The Morrison Government’s Budget commitments position Defence to implement the 2020 Force Structure Plan and address our increasing strategic competition, now and into the future.
The Morrison Government will invest $270 billion over the next 10 years to upgrade the capability and potency of the Australian Defence Force. The Government will provide Defence with $42.7 billion in 2020-21 and $190.2 billion over the Forward Estimates. This includes:
- $24.3 billion of active infrastructure projects spread throughout Australia’s states and territories, including our regions, which since the implementation of the Local Industry Capability Plans has seen 73 per cent of infrastructure work awarded to local companies and businesses.
- $728 million to continue to fund major operations. Australia currently has around 2,300 Defence personnel deployed around the world, including on operations across the Indo-Pacific and the Middle East region.
We have implemented a $1 billion investment package aimed at boosting Australia’s defence industry and supporting thousands of jobs across the country.
11,000 Australian companies directly benefit from the Defence investments, and when further downstream suppliers are included the benefits flow to approximately 70,000 workers.
We are committed to keeping all Australians safe and secure. National security is a key priority for the Government which is why we have committed to invest $173.5 million to support our national security objectives.
The Australian Federal Police will receive $300.2 million to maintain frontline policing, enhance the AFP’s surge capacity, and provide for a healthy and agile workforce to respond to emerging and enduring threats.
To protect the community from unlawful non-citizens including those released from prisons, but unable to be deported due to COVID19 restrictions, the Government will provide $55.6 million in 2020-21 to reactivate North West Point immigration detention centre on Christmas Island. Up to 250 high-risk detainees including those who have been convicted for crimes involving assault, sexual offences, drugs and other violent offences will be transferred to Christmas Island.
The Safer Communities Fund (SCF) will continue for a sixth round, receiving $35.0 million over four years to ensure community and local government organisations can address crime and anti-social behaviour.
This Government is making the nation’s largest ever investment in cyber security through our $1.7 billion 2020 Cyber Security Strategy, which includes $1.4 billion over the next decade to enhance the cyber security capabilities and assistance provided to Australians through the Australian Signals Directorate and the Australian Cyber Security Centre. This significant investment, known as the Cyber Enhanced Situational Awareness and Response (CESAR) package, will mean that we can identify more cyber threats, disrupt more foreign cybercriminals, build more partnerships with industry and government and protect more Australians.
The 2020-21 Budget has allocated $201.5 million for initiatives to implement the 2020 Cyber Security Strategy including building new cybersecurity and law enforcement capabilities, assisting industry to protect themselves and raising the community’s understanding of how to stay safe online.
The 2020-21 Budget has allocated $10.6 million to implement the Government’s next five-year National Action Plan to Combat Modern Slavery 2020-25, which will guide our response to fighting this crime and supporting victims. This funding will help equip businesses to manage supply chain risks, provide multi-year grant funding opportunities for organisations to deliver projects to combat modern slavery in Australia, and assist international partners to address modern slavery and human trafficking.
Veteran's Mental Health and Employment
The 2020-21 Budget measures are aimed at ensuring veterans and their families continue to have access to the support they need by helping them find a job after service, and supporting their physical and mental health needs.
The Government continues to put veterans’ and their families’ first with our record investment in funding for mental health services and support for those in the ex-service community.
The Government has provided $101.7 million over four years to further bolster mental health support. The funding for veteran mental health and wellbeing includes:
- $94.3 million over four years to improve mental health outcomes and ensure high quality care for our older veterans and their families, and to better support their transition to civilian life by increasing fees paid to mental health, social work and community nursing providers.
- $2.4 million over four years to expand eligibility for the Coordinated Veterans’ Care program, which provides GP-led team-based care, to White Card holders with an accepted mental health condition.
- $5.0 million over four years to expand the 24/7 Open Arms – Veterans & Families Counselling (Open Arms), especially in regional and remote areas.
The Government has long recognised that the transition process from leaving the Australian Defence Force (ADF) and re-entering civilian life, including finding meaningful employment, is a crucial step. Building on successful initiatives to-date, the Budget will invest $23.7 million for increased transition and employment support.
The Government will provide $2.6 billion for two additional Economic Support Payments of $250 to pensioners and other eligible recipients.
Reforms to Make Your Super Work Harder for You
The Government is continuing to progress reforms to ensure members’ money is maximised for their retirement. The Government’s Your Future, Your Super reforms will see members save $17.9 billion over 10 years.
The Government wants members to choose the best super fund for them and these reforms will make the system simpler and easier to engage with. This will help improve competition and drive fees down from the $30 billion that Australians currently pay each year.
The reforms will remove the flaws in the system that have created unwanted multiple accounts. They will also make it clear to a member when their fund is underperforming. Importantly, these changes will make super trustees more accountable and provide more transparency on how they are spending members’ money.
Record Funding into Education and Child Care
The Government is investing record funding in Australian schools to ensure all students have the necessary skills for future study or work.
Recurrent annual funding for schools has increased from $13.8 billion in 2014 to $21.8 billion in 2020, with a commitment of $310 billion in total recurrent funding from 2020 to 2030.
The COVID-19 pandemic has resulted in significant changes to teaching and learning for young Australians and the Government will provide an additional $146 million to improve the educational outcomes of school leavers and disadvantaged students. We have also guaranteed $18 billion in funding for all higher education institutions in 2020 in response to the COVID-19 pandemic.
The Government is extending this funding guarantee until 2023 to support universities and higher education providers to continue to deliver quality teaching.
Child care services are vital for so many parents and their children. In 2020-21, the Government will pay approximately $9 billion in Child Care Subsidy payments.
Due to the means-tested nature of the subsidy, families who have lost income or work during the COVID-19 pandemic and continue to use care will receive a higher level of subsidy.
$62.5 MILLION FOR STIRLING TRANSPORT INFRASTRUCTURE
The Morrison Government will invest $1.1 billion in WA transport infrastructure to boost the economy and create 6,800 jobs.
The latest funding injection builds on a series of state-wide infrastructure investments that were announced during the Commonwealth’s initial COVID-19 response. The total investment of almost $1.3 billion includes an additional $62.5 million for projects in Stirling.
Local Stirling projects include:
- $45 million funding for Stirling Bus Interchange (supporting 625 direct and indirect jobs)
- $17.5 million additional funding for Stephenson Ave, on top of the $65 million previously announced (supporting 800 direct and indirect jobs)
The Government’s infrastructure investments are supporting 100,000 jobs on worksites across the country. The Budget expands our record 10 year infrastructure pipeline to $110 billion.
The measures announced in this Budget, together with what we have announced since the start of the crisis, will see $14 billion in new and accelerated infrastructure projects support a further 40,000 jobs.
The Budget also includes a $2 billion investment in road safety upgrades to save lives. Funding for these shovel ready projects will be provided on a use it or lose it basis.
The Government is also expanding the Local Roads and Community Infrastructure program. Investing an additional $1 billion to support local councils to immediately upgrade local roads, footpaths and street lighting to create jobs now.
$1.5 BILLION TO TRANSFORM AUSTRALIAN MANUFACTURING
As part of our JobMaker plan, the Morrison Government is launching a new era of Australian manufacturing to rebuild the economy, create jobs and recover from the COVID-19 recession.
The Government is investing $1.5 billion in new funding, over the next four years in the Modern Manufacturing Strategy to make Australian manufacturers more competitive, resilient and able to scale-up to take on the world.
The centerpiece of the Strategy is the $1.3 billion Modern Manufacturing Initiative (MMI), which will see the Government strategically invest in projects that help manufacturers to scale up and create jobs.
The MMI will support projects within six National Manufacturing Priorities which reflect Australia’s established competitive advantages or emerging areas of priority:
- Resources technology and critical minerals processing;
- Food and beverage;
- Medical products;
- Recycling and clean energy;
- Defence; and
Industry will be engaged to co-design tailored road maps for each of the priority sectors to set clear goals over the next two, five and 10 years, and identify the barriers and opportunities that will guide action and investment.
$1.2 BILLION TO CREATE 100,000 NEW APPRENCESHIP POSITIONS
The Morrison Government will invest an additional $1.2 billion to support Australian businesses to employ 100,000 new apprentices and trainees as part of our COVID-19 economic recovery plan.
Starting from 5 October 2020, businesses who take on a new Australian apprentice will be eligible for a 50 per cent wage subsidy, regardless of geographic location, occupation, industry or business size.
The subsidy will be available to employers of any size or industry, Australia-wide who engage an Australian apprentice or trainee from 5 October 2020 until the 100,000 cap is reached.
Under the new measure, employers will be eligible for the wage subsidy for a new or recommencing apprentice or trainee for the period up to 30 September 2021, up to $7,000 per quarter.
The measure builds on the existing $2.8 billion Supporting Apprentices and Trainees wage subsidy that is helping employers to retain their apprentices and trainees.
10,000 Additional First Home Buyers
As part of the Morrison Government’s economic recovery plan to create jobs, rebuild our economy and secure Australia’s future, an additional 10,000 first home buyers will be able to purchase a new home sooner under our First Home Loan Deposit Scheme.
Our First Home Loan Deposit Scheme has already helped almost 20,000 first home buyers purchase a home this year with a deposit as low as 5 per cent.
An additional 10,000 places will be provided from 6 October 2020 to support the purchase of a new home or a newly built home.
$800 MILLION JOBMAKER DIGITAL BUSINESS PLAN
The Morrison Government is investing almost $800 million to enable businesses to take advantage of digital technologies to grow their businesses and create jobs as part of our economic recovery plan.
The COVID-19 pandemic has accelerated the adoption of digital technologies by Australian businesses and consumers, which has enabled many to transform their operations and continue to trade through the crisis.
Our Digital Infrastructure package is estimated to increase Australia’s GDP by $6.4 billion a year by 2024 and around $1.5 billion of this additional economic activity is estimated to flow to regional Australia each year.
These initiatives are in addition to the Government’s $4.5 billion NBN investment plan to bring ultra-fast broadband to millions of families and businesses across the economy over the next two years.
They also complement our actions to build digital skills and to improve trust and security in the digital economy, including through the $1.67 billion investment in the 2020 Cyber Security Strategy and investments in online safety.