Federal Budget 2020: What's in it for Me?

The small business community has largely given a positive reception to last week’s 2020 Federal Budget, with its focus on jobs recovery, tax breaks and the expansion of the instant asset write-off.

Locally, Melton City Council welcomed the additional $30 million allocated to the Western Rail Plan - which it is hoped will bring electrification of the Melton line a step closer – along with $1 billion added to the Local Roads and Community Infrastructure Program.

What’s in it for you?

The key benefits will come in the form of cash back from the ATO on any assets you buy for your business, along with significant funding to subsidise the wages of any new young employees you take on:

• Extending the instant asset write-off
  Businesses will now be able to deduct the full cost of new capital assets purchased and first used or installed from by 30 June 2022.

• Temporary full expensing
  Small and medium businesses will also be able to apply “full expensing” to second-hand assets.

• Loss carry back
  Companies can offset losses against previous profits on which tax has been paid, to generate a refund.

• Staff re-training tax concession
  Exemption from the 47% Fringe Benefits Tax on employer-provided retraining activities, for employees redeployed to a different role in the business.

• Wage subsidy scheme: JobMaker Hiring Credit
  Small Businesses which hire eligible young people will receive $200 a week if they hire a person aged 16 to 29, or $100 a week if they hire a person aged 30 to 35. The new workers must have been receiving either JobSeeker, Youth Allowance or Parenting Payment for at least one of the three months before they are hired, and will have to work for at least 20 hours a week.

Also announced in Budget 2020:

Employment
• The Federal Government will cover 50% of the wage costs for 100,000 new apprenticeships and traineeships.

Tax cuts
• A permanent tax cut of $47 a week for high-income ($125k+) earners.
• Middle-income earners ($90k-$125k) will receive a one-off tax cut of $21 per week.
• The 19 % personal income tax threshold will be lifted from $37,000 to $45,000, and the 32.5 per cent threshold from $90,000 to $120,000 .

COVID-19 assistance
• Pensioners and other eligible recipients will receive two additional economic support payments of $250, as part of a $2.6 billion package.
• Jobkeeper payments will be extended a further six months until 28 March 2021.
• The $250 per fortnight Coronavirus Supplement will be extended until 31 December.

Infrastructure
• Rollout of the 5G network will be accelerated with a $4.5 billion investment in NBN Co.
• $1.141 billion funding package for road and rail projects across Melbourne and regional Victoria including an additional $30 million allocated to the Western Rail Plan.
• $14 billion in new and accelerated infrastructure projects over the next four years in every state and territory.
• $3 billion towards shovel-ready projects to support further job creation and economic recovery, including for small scale road safety projects.

Read the budget in full or talk to your accountant about how these measures will affect your enterprise.