Federal Budget 2021-22
Building a healthy recovery
The October 2020 Budget was a stimulus Budget designed to soften the blow of COVID-19-related impacts for Australians. Now 6 months on and the report card is largely positive. Economically we are in a much better position than the Government’s forecasts in October last year.
The focus of the 2021-22 Federal Budget is consolidating this positive picture, and is designed to support the next phase of Australia’s business-led economic recovery and return to growth.
If you’d like the summary of the budget in infographics only, visit here. Or below is the Bottom Line of the budget including key points.
- This Budget extends a range of COVID‑19 health response measures investing an additional $1.9b in the vaccination program
- $1.7b for Australia’s COVID‑19 Vaccine Strategy, including for vaccine purchases, delivery and logistics of the roll‑out.
- Domestic manufacturing of the AstraZeneca vaccine continues investigating options to expand our domestic vaccine manufacturing capabilities, including production of mRNA vaccines.
- Other health services such as home delivery of essential medicines and support for regional and remote Indigenous communities have been extended.
- Continuing Medicare Benefits Schedule telehealth items for general practitioner, allied health and specialist services to 31 December 2021.
- Aged care COVID‑19 supports have been extended to 31 December 2021 & include rapid in‑reach testing for residential aged care facilities and extended aged care preparedness.
- Additional personal protective and medical equipment for the National Medical Stockpile, increased hospital funding through the National Partnership on COVID‑19
- In partnership with UNICEF, Australia will procure vaccine stocks of up to 6m doses for the Pacific & Timor‑Leste in ’21. The Australian Government is working with other organisations & countries to provide financial support to Indonesia and PNG
$17.7 b to improve Aged Care
- $17.7b for a comprehensive aged care reform package in response to the Royal Commission into Aged Care Quality and Safety. Including
- 80,000 new home care packages,
- increased time nurses and carers spend with residents
- 33,000 new training places for personal carers
- a new indigenous workforce, and
- additional $10 per resident per day payment from 1 July 2021
- $7.8b to improve the quality, safety and sustainability of residential aged care services.
- An additional $74.8million to assist providers to deliver high-quality, individualised care for people living with dementia.
- $6.5b to provide an additional 80,000 Home Care Packages.
- From 1 July 2022, residential care providers will be required to report and publish care staffing minutes for each facility on the MyAgedCare website.
- $1m to establish new arrangements to provide greater independent oversight of the aged care system.
- An additional $301.3m to be provided to address failures in care and increase the capability and capacity of the independent Aged Care Quality and Safety Commission, which is responsible for regulating the sector.
- $365.7m to enhance primary care for older Australians, including improved access to G.P.’s
A more flexible retirement
- From 1 July 2022, individuals aged 67 to 74 will no longer be required to meet the work test when making or receiving non-concessional or salary sacrificed superannuation contributions
- From 1 July 2022, the minimum age for the downsizer contribution will be lowered from 65 to 60, allowing Australians nearing retirement to make a post-tax contribution of up to $300,000 per person when they sell their family home.
- From 1 July 2022, increasing access to the Pension Loans Scheme, including a ‘No Negative Equity Guarantee’.
- An extra $13.2b to the NDIS over four years.
- $17.9m over four years for early intervention support to young children with developmental concerns or disability.
- From 1 January 2022 people with disability who are eligible for Disability Employment Services and are job-ready can choose to participate in digital services.
Supporting Australians’ mental health
- A landmark reform of the mental health and suicide prevention system, with a record additional $2.3b over four years for mental health and suicide prevention.
- Investing $158.6m to develop a shared commitment from states and territories through a National Agreement on Mental Health and Suicide Prevention
- $22m to give the families and loved ones the postvention support they need.
- $248.6m for access supports to early in life and early in illness to avoid the need for more intensive interventions.
- $111.2m to improve the availability of high quality, low-cost digital mental health services.
- $278.6m over four years will expand and enhance the headspace centre network. Headspace is a core service that provides youth-friendly and stigma-free care.
- $487.2m towards specialist Head to Health Adult Mental Health centres and satellites which will provide essential care
- $26.9m to support Australians with an eating disorder, including establish a National Eating Disorder Research Centre
- The range of Medicare-rebated therapy options will be expanded
A Healthier Australia
- A further $5.9m to continue the Good Sports Program, to community sports clubs to develop policies that address alcohol, illicit drugs, mental health and healthy eating issues.
- $1.5m to the Hello Sunday Morning ‘Daybreak Program’ to help Australians who are trying to reduce the problematic use of alcohol.
- $421.6m to build the next wave of My Health Record and support the Australian Digital Health Agency’s work
- $40.8m to continue the Sporting Schools program, encouraging children to participate in sport and physical activity
- $460.4m to support veteran needs, address veteran suicide, and accelerate the processing of compensation claims.
- The Government has announced a Royal Commission into Defence and Veteran Suicide to inform improved services for Australian Defence Force members and veterans at risk of suicide.
- $32.1m to continue delivering annual international ANZAC Day commemorations and domestic commemorative activities. This is part of the Government’s response to the Productivity Commission’s Report A Better Way to Support Veterans.
Royal Commission into Institutional Abuse of Children
- Contributing $146m to enhance child safety and wellbeing, particularly for vulnerable groups
- Our National Strategy to Prevent Child Sexual Abuse will deliver on key recommendations made by the Royal Commission into Institutional Responses to Child Sexual Abuse.
- Implementing the recommendations of the Sex Discrimination Commissioner’s Respect@Work Report.
- The Government’s Roadmap for Respect will provide $20.5m to help ensure all Australians have safe workplaces, free from sexual harassment.
- Services for children aged 0–12 years will be expanded by investing $100.8m to strengthen support for parents; and establishing a new network of child mental health and wellbeing hubs.
- A patent box is being introduced to encourage businesses to undertake their R&D in Australia and keep patents here. The patent box will tax income derived from Australian medical and biotech patents at a reduced 17% effective concessional corporate tax rate.
Cessation of employment removed as tax point for Employee Share Schemes
- Removing the cessation of employment taxing point for tax-deferred Employee Share Schemes (ESS) that are available for all companies.
***Full expensing and loss carry back extended to 2023
- Temporary full expensing and temporary loss carry-back are being extended for a further year to June 2023.
*** Low- and middle-income tax offset extended to 2022
- The low- and middle-income tax offset (LMITO) is extended for a further year to June 2022. Worth up to $1,080 for individuals or $2,160 for dual income couples.
New bright-line test for individual tax residency
- Replace the individual tax residency rules. – The primary test will be a simple ‘bright line’ test: a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
- $903.5m for more places and support for people wanting to access higher education.
- $26.1m to provide an additional 5,000 Commonwealth supported short course places in 2021.
Supporting international education providers
- English language course providers given access to grants of up to $150,000 to invest in expertise and new teaching solutions.
- Extending regulatory fee relief for international education providers until 31 December 2021
- $2b to deliver a comprehensive four-year Strategic Reform Agreement to provide funding certainty and long-term stability for the early childhood education sector.
- Support access for all children to at least 15 hours a week of quality learning in the year before school irrespective of location
- $9.7b in 2021‑22 to reduce out-of-pocket child care costs for families.
- A commitment of $289b in total recurrent funding for schools over the next ten years.
- Removal of the $450/month superannuation guarantee minimum threshold. To commence from the start of the first financial year after the enabling legislation receives Royal Assent. (expected date is from 1 July 2022)
Super Guarantee Increases to Continue
- The Federal Government has elected not to seek to delay or pause the future Super Guarantee increases.
- The current time table which will remain in place
- New measures to improve women’s safety, economic security, health and wellbeing with a $3.4b package. This includes $1.1b in funding for women’s safety; $1.9b to support women’s economic security incl.$1.7b to improve the affordability of childcare for Australian families and $351.6m in women’s health and wellbeing measures
Including announcements in this Budget, since the start of the COVID‑19 pandemic, the Government has…
- Increased the 10-year pipeline to $110b, supporting 100,000 jobs
- Completed 45 major projects with an Australian Government contribution of $7b
- Brought forward planned spending on infrastructure projects, resulting in over $70b of infrastructure
- Committed $5.5b to deliver shovel ready small-scale projects through the Road Safety Program & Local Roads and Community Infrastructure Program
- An additional $15.2b over the next ten years from 2021‑22 for road, rail and community infrastructure projects across Australia.
- The SME Guarantee Scheme – providing participating lenders with a 50 % guarantee on an unsecured or secured basis (excluding residential property), with a maximum loan size of $1m and a loan term of up to five years. will continue.
SME Recovery Loan Scheme
- The SME Recovery Loan Scheme, will have an increased government guarantee of 80% to a higher maximum loan size of $5m and maximum loan term of 10 years with interest rates capped at around 7.5%.
- Borrowers may also be offered repayment holidays of up to 24 months on appropriate products.
Encouraging Australians to holiday at home
- Additional Funds for Tourism Australia to ramp up domestic marketing to stimulate demand for travel
- $51m for Recovery for Regional Tourism to assist tourism regions highly reliant on international travellers.
- $1.2b package for the aviation & tourism sectors to keep planes in the air, safeguard jobs and encourage Australians to travel in Aust.
- Includes $274.6m in support for travel agents, tour operators, business events, zoos and aquariums.
- Extending the Domestic Aviation Network Support and Regional Airline Network Support Programs until 30 Sep 2021.
- Extending the partial Airservices Australia fee waiver and reinstating the domestic aviation security charge rebate
Supporting the creative and cultural sector
- $300m to help activate and support the successful re‑opening of Australia’s creative and cultural sector.
- An additional $125m for Restart Investment to Sustain and Expand (RISE) Fund grants to provide essential seed funding for new productions, festivals and events
- The $50m Filming Temporary Interruption Fund is being extended for a further six months.
- Establishing the Family Home Guarantee, creating a pathway to home ownership for single parents to enter the housing market.
- 1 July 2021, providing 10,000 guarantees over four years for eligible single parents with dependants to build a new home or purchase an existing home with a deposit of as little as 2%, regardless of whether that single parent is a first home buyer or previous owner-occupier.
First Home Loan Deposit Scheme
- 10,000 places released for first home buyers on 1 July each year to buy a new or existing home.
- Over 120,000 grant applications for eligible home owners, including first home buyers, to build a new home or substantially rebuild an existing home.