Federal Budget 2021-22
“The Australian economy is well on its way to recovery.” – Josh Frydenberg.
If the economy was a final destination in an orienteering race, the impact of the past 12-15 months has placed significant cliffs and gullies on the trail towards the ‘economic recovery’ finish line.
While the terrain we’ve traversed so far has been tough and challenging, the Australian economy has fared much better than most around the globe. The previous Federal Budget in October 2020, the fiscal measures to manage the workforce and to encourage spending, as well as the successful health management of COVID-19, have all contributed to our current strong position.
In Josh Frydenberg’s third Federal Budget, the map has been updated with further way-finders to continue the climb to recovery for our economy.
A summary of the key announcements include tax relief for low and middle income earners as well as for small to medium businesses. In particular, small brewers and distillers will receive welcomed relief in full excise refunds. Superannuation changes and continuations will help women maximise their retirement savings, and there was a clear focus on keeping women in the workforce by boosting childcare. In addition, attracting global talent to Australia with changes to tax rules, will help capitalise on the enviable position we have found ourselves in globally.
A surprise announcement in this budget was the Patent Box Regime which is set to boost innovation – particularly in medical and biotechnology.
The main announcements mostly involved new spending to prime the economy and to prioritise what the Morrison Government sees as key areas such as aged care, family, domestic violence prevention and child care.
While the pace of this part of our course is not a ‘sprint and chase’, it’s safe to say the economic compass provided by this budget will deliver solid bearings, and a course correction to guide us through the next part of this much longer race. Additionally, we are sure the Government hopes this budget provides a solid first leg in the journey towards the next federal election, due before May 2022. While we will, no doubt, have some hills and valleys to traverse along the way, the trail to recovery appears to be well within our sights.