Federal Budget Overview
This week Federal Treasurer Josh Frydenberg handed down the government’s budget for 2021/22. Treasury is reporting that the “economy has recovered strongly and is set to return to pre-pandemic levels nine months earlier than expected” and that the “unemployment rate's recovery (is) set to be five times faster than the 1990s recession.
The government has announced a new biosecurity package investment of $371 million over the next four years, spotlighting the potential benefits and growth opportunities for Australia’s nursery industry. Greenlife Industry Australia staff had direct and indirect input to have budget allocated to improving nursery stock importation and a pilot study for a coregulated approach to allowing certified, high health nursery businesses managing the importation process.
Below we have outlined elements of the budget important to the Greenlife Industry including announcements of business tax incentives, apprenticeship programs and highlights for the agriculture sector.
Pay as you go withholding
Income tax rates are unchanged following a continuation of the tax cuts which were introduced after October 2020.
Asset investment
Upfront deductions are available on eligible items for your business if you buy new plant and equipment between now and 30 June 2023. You can also apply this instant write-off to second-hand assets that your business purchases if your turnover is less than $50 million.
Apprenticeships
Subsidies continue to be made available to make it easier to take on new employees until 31 March 2022. The subsidy to 50% of wages paid to apprentices or trainees for 12 months from the date they commence employment (up to a maximum of $7,000 per quarter) and eligible places now uncapped.
Incentives & Support
If your business needs additional support, financial incentives and support are available including the ability to pause or modify ATO debt recovery action; increased ability to access Government supported loans through the SME Recovery Loan Scheme; and the ability to potentially claim refunds of tax paid in prior years where you have current year losses.
Superannuation
Be aware of the Government plans to remove the $450 threshold for Superannuation Guarantee payments. Employees will start to receive super from the first $1 earned and businesses need to be sure they comply.
Company tax rate
The reduced company tax rate cut that kicks in from 1 July 2021 for small to medium sized trading companies (with a turnover of less than $50 million). The new rate of 25% will be the new tax rate payable on profits and will also be the new franking rate for dividends.
Self-education expenses
The Government is removing the exclusion of the first $250 of deductions for prescribed courses of education funded by individuals. This is important for employees funding their own education.
Impacts on Industry
Several important investment measures were previously announced by the Prime Minister and Minister for Agriculture David Littleproud last week. Greenlife Industry Australia welcomed those measures, and you can review GIA’s official response HERE.
As always, the information in this article does not constitute advice and you are encouraged to speak with your accountant for information relevant to your circumstances. For more information and fact sheets on the personal and business tax changes from this year’s budget visit https://budget.gov.au/2021-22/content/overview.htm
