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Budget 2020

Written and accurate as at: Oct 06, 2020 Current Stats & Facts

An unprecedented budget for an unprecedented time, this year's Federal Budget is focused on job creation and rebuilding the economy. Travel restrictions and other containment measures during the pandemic affected the ability of consumers and businesses to undertake their usual spending and investment activities, causing our current recession after almost 3 decades. This budget brings a heavy deficit, predicted to hit $213.7 billion in 2020 and remain at a $66.9 billion deficit by 2023-24. 

Our net debt (how much we owe overall) is now expected to reach $703 billion this year and peak at a record $966 billion by June 2024 (44% of GDP).

Our Treasurer Josh Frydenberg has acknowledged “This is a heavy burden, but a necessary one to deal with the greatest challenge of our time.” 

Following is a summary of some of the major proposals and how they may affect you:

Personal Tax Rates

Under the Government's changes, individuals will benefit from immediately 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 2020-2021.  

Income People Impacted Tax relief
>$37k 2.4 million ppl >$510
$37k - $48k 1.8 million ppl $510 - $2,160
$48k-$90k 4.6 million ppl $2,160-$2,295
$90k-$126k 1.5 million ppl $2,295-$2,745

When the Government’s Plan is fully implemented in 2024–25, an individual with a taxable income of $200,000, who earns 4.4 times more income than an individual with a taxable income of $45,000, will pay around 10 times more tax.  The Government has legislated the abolition of the 37 per cent tax bracket, and the reduction of the 32.5 per cent marginal tax rate to 30 per cent, from 2024–25. This embeds genuine reward for effort and means around 95 per cent of taxpayers will face a marginal tax rate of 30 per cent or less in 2024–25.

Home Buyers and Home Owners

An additional 10,000 first home buyers will be provided with the First Home Loan Deposit Scheme in 2020-21 to support the purchase of a new home or a newly built home. This will allow first home buyers to secure a loan to build a new home or purchase a newly built dwelling with a deposit of as little as 5 per cent, with the Government guaranteeing up to 15 per cent of a loan. The purchase cap will also be lifted from $750,000 to $950,000.

A targeted capital gains tax exemption for granny flat arrangements where there is a formal written agreement, applying to arrangements with older Australians or those with a disability


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.

Small businesses with a turnover of $10 million to $50 million will be able to claim up to 10 tax breaks, with fringe benefits tax scrapped on car parking, phones or laptops, simpler trading stock rules and easier PAYG instalments. 

Employers will be able to use existing corporate records, rather than prescribed records, to complete their fringe benefits tax (FBT) return. This measure will substantially reduce the time employers, and employees spend on record keeping.

The Government is also exempting employer-provided retraining activities from FBT. It will encourage businesses to retrain and redeploy their workers to new roles within the business. 

Job Creation

Jobmaker - From 7 October 2020, the Government's JobMaker Hiring Credit will allow eligible employers to claim $200 a week for each additional eligible employee they hire aged 16 to 29 years old; and $100 a week for each additional eligible employee aged 30 to 35 years old. New jobs created until 6 October 2021 will attract the JobMaker Hiring Credit for up to 12 months from the date the new position is created. To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring. 

That comes on top of its already announced $1 billion JobTrainer program to provide more low-cost training places for school-leavers and $1.2 billion towards wage subsidies for 100,000 new apprenticeships and traineeships.

Manufacturing - The government has committed $1.3 billion in grants to encourage advanced manufacturing in six key areas — defence, space, medicine and medical products, food and beverages, resources technology and recycling and clean energy

Infrastructure - The Government's also investing $14 billion in new and fast-tracked infrastructure projects. That includes bringing forward $7.5 billion of spending on road and rail projects, a new $2 billion investment in road safety upgrades and $1 billion for local councils to upgrade roads, footpaths and street lighting. Farmers and rural communities will benefit from $2 billion in funding over 10 years in improving water infrastructure.

Women's Economic Security StatementThe Security Statement outlines $240 million of funding measures for the next four years that focus on increasing jobs for women in male-dominated industries like construction, more co-funded grants for women-founded start-ups, a focus on encouraging girls and women to pursue careers in STEM and money for a Respect@Work council to tackle sexual harassment in workplaces.


Australians will automatically keep their super fund when they change employers. By 1 July 2021, if an employee does not nominate an account at the time they start a new job, employers will pay their superannuation contributions to their existing fund. Employers will obtain information about the
employee’s existing superannuation fund from the ATO by logging onto ATO online services and entering the employee’s details. If an employee does not have an existing superannuation account and does not decide on a fund, the employer will pay the employee’s superannuation into their
nominated default superannuation fund.

An online comparison tool known as ‘YourSuper’ will also be established where super funds will be publicly ranked by performance on a new government-run website under new benchmarks.


JobSeekers - The current $250 coronavirus supplement to the unemployment payment will end on December 31.

Elderly Australians  - Up to 23,000 extra home-care packages, funded at the cost of $1.6 billion will be allocated to elderly Australians to receive care at their homes.

Aged pensioners - Two $250 payments will be received, one in December and one in March.

Mental Health - Acknowledging the mental toll of COVID-19, the Government has doubled the number of rebated psychology sessions, with Australians now able to access up to 20 sessions through Medicare.

COVID Vaccine and Travel

Vaccine - The Government is putting billions towards COVID-19 vaccines both here and abroad.

Migrant families - The Government is increasing the family stream of immigration "on a one-off basis" and prioritising partner visitors for people living in regional Australia.

International travellers – no hints on when international travel can resume. 


Overall, this budget is focused on boosting the economy through job creation, business incentives and tax cuts. The big-ticket items from the Budget are the Government’s commitments to increased subsidies to hiring youth, incentives for job training and business and expenditure on infrastructure. 

However, with many Australians feeling pressure from increased costs of living and the inevitable impact on tightened household budgets, the proposed acceleration of personal tax cuts is positive, and many will look to benefit from income tax changes. 

Note that it is important to remember though that any possible benefit gained is only half the story. The real question is what you do with those savings. 

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