The 2020 budget: tax cuts, JobTrainer and $281 billion in deficit – everything you need to know
Treasurer Josh Frydenberg will reveal the Federal Budget on 6 October, but in that great tradition of budgets everywhere, there have been many leaks.
This budget will be like no other. The government had pledged that pre-COVID, the budget would have been in surplus for the first time since 1975. Instead, we have the first recession in nearly 30 years.
It is expected that we will be in a total deficit of around $281.4 which includes $85.8 billion for the 2019/20 financial year and $184.5 billion for the 2020/21 financial year – the highest deficit since World War II.
Here is what we know about the budget so far:
If you’re a taxpayer
Mr Frydenberg has hinted that Australians may see tax cuts earlier than scheduled. The cuts which were supposedly scheduled for 2022.
If you earn under $18,200 you won’t see any changes from the anticipated tax changes.
The 19 per cent tax rate threshold is expected to increase to $45,000, from $41,000.
The 32.5 per cent tax threshold could see an increase to $120,000 from $90,000.
The 37 per cent tax threshold could then be extended to include income earners earning over $120,000.
This means if you earn $40,000 would see an extra $8.75 a week in their pocket, or $455 a year while those earning $60,000 or $80,000 could expect $10.38 extra a week or $540 a year.
And Aussies earning $100,000 a year would find an extra $21.63 per week in their pay packet, or $1,125 a year.
If you’re a pensioner
There will be some relief for Australians pensioners with Social Services Minister Anne Ruston revealing they would receive some sort of cash boost in the upcoming budget.
“Further support around our pensions is something that is contained in the budget,” Ms Ruston told the Sydney Morning Herald.
The Prime Minister also flagged further support for pensioners, revealing in August that the Treasurer had a plan to work through issues affecting older Australians.
If you are a young Australian
Young Australians might receive aid in the form of a cash boost.
Mr Morrison said, at the Youth Futures Summit in August that getting young Australians back into jobs was a huge priority for him.
The government announced the JobTrainer program in July, which is aimed at retraining people into different sectors.
If you’re a small business
The government unveiled a JobMaker Digital Plan earlier in September which the Prime Minister Scott Morrison said would help economic growth and jobs.
The plan includes a $1.67 billion investment in cybersecurity, a $4.5 billion investment in NBN and a further $800 million on a range of programs in infrastructure and security to help businesses progress into the digital world.
“The announcements we’re making today on accelerating our work in the fintech sector, consumer data rights, upgrading automated regulation compliance, the end of phone books full of forms, where things can be done online and digitally, remembering your previous answers so you don’t have to go through and fill out the forms later,” Mr Morrison said.
Businesses would get a digital identity that will allow them to have seamless interface with government and e-invoicing.
Mr Frydenberg also revealed that the changes would also mean that execution of documents would be able to be signed online.
If you’re in the infrastructure sector
The government has already earmarked that they would be putting money behind the infrastructure sector, with Deputy Prime Minister Michael McCormack telling the Sydney Morning Herald it would be an area that would pull Australia out of the COVID recession.