The Federal Government released the 2020 Budget last night, so for your convenience FTMA has done a quick summary of what it means for your and your business. There are some great things included in this year’s budget, especially if you are looking to hire new staff at the moment or in the near future with the JobMaker scheme. Also there have been some changes to insolvency and consumer credit.
In addition to the overview below, we have included several Government Fact Sheets related to the Budget at the bottom of the article. These include:
- Budget Overview (45 pages)
- Budget Overview with only the relevant pages for our industry (Relevant Industry Overview)
- JobMaker Hiring Credit
- Lower Taxes
- Your Future, Your Super
- Insolvency Reforms
- Consumer Credit Reforms
- FTMA Fact Sheet – Training & Apprenticeships
Yes we know it is a lot of information, but we hope the individual fact sheets along with the summary dot points below help make it easier to consume.
- Businesses with a turnover of less than $5bn – all but the top 1% – will be able to deduct the full cost of capital assets purchased after budget night and first used or installed by 30 June 2022.
- Small and medium businesses will also be able to apply “full expensing” to second-hand assets; businesses earning $50m to $500m will be able to do so for assets of less than $150,000.
- Companies with turnover up to $5bn will be able to offset losses against previous profits on which tax has been paid, to generate a refund.
- Exempting from the 47% fringe benefits tax employer-provided retraining activities to employees who are redeployed to a different role in the business.
- $4.5bn investment in NBN Co and $29.2m to accelerate the rollout of the 5G network.
- With unemployment forecast to peak at 8% by the end of the year, the government says the 2020 budget is focused on job creation. The centrepiece of that effort, as well as a wage subsidy for apprentices, is a new time-limited hiring credit for unemployed workers aged between 16 and 35.
- To gain access to the credit, people will have to work at least 20 hours a week. The program will cost $4bn and run for 12 months.
- Any business, apart from the banks, will be eligible to gain access to the credit that will be paid at $200 a week for people under 30, and $100 a week for people aged between 30 and 35.
First Home Buyers
- Those open to buying a brand-new home will benefit from the expansion of the government’s First Home Loan Deposit Scheme.
- The scheme will be extended to help an extra 10,000 people and the value of the properties eligible will also be increased.
- Previously properties worth up to $700,000 in Sydney were covered under the scheme, but this will be increased to $950,000.
- Melbourne’s cap will be increased to $850,000 and Brisbane to $650,0000.
- It means that first home buyers with a 5 per cent deposit won’t have to pay lenders mortgage insurance.
Those Who Want to Build Granny Flats
- Building a granny flat for an elderly relative will be cheaper from July 1 next year as capital gains tax will no longer have to be paid.
- The changes mean capital gains tax will not apply to the creation, variation or termination of a formal written granny flat arrangement providing accommodation for older Australians or people with disabilities.
- The measure will begin as early as July 1, 2021 subject to the passing of legislation.
Training & Apprecticeships
- Hiring an apprentice has never been so cheap with the government announcing it will pay half the wages of 100,000 new employees.
- Starting from October 5, any business that takes on a new or recommencing apprentice or trainee will be eligible for a 50 per cent wage subsidy. This is regardless of geographic location, occupation, industry or business size.
- Businesses will also no longer have to pay fringe benefits tax if they pay to retrain or reskill employees who are moved to a different role in the business.
- FTMA Australia has spoken to TABMA and Timber Training Creswick and has created a factsheet on available training (below).