World Wide Tax News Issue 56 - October 2020

Federal Budget 2020-2021

Touted as the most significant Federal Budget in decades, the government hopes that its delivery on 6 October 2020 sets the scene for a business-led recovery out of the first recession in almost 30 years. 

Unsurprisingly, the Budget encourages spending on many levels. There are many tax-related measures for business, as well as a number of positives for individuals.  Industry has not been forgotten either, with a number of supporting measures for Agriculture, Real Estate, Education, Infrastructure, Aged care and Child care.

Amongst the measures for business, the Treasurer has delivered a Budget with a focus on the ABC’s:

  • A is for Asset Write-offs – enabling businesses to deduct the full cost of new capital assets. For small and medium sized businesses, second –hand assets will also be covered.
  • B is for Business Concessions – loss carry-back provisions for businesses will be provided to offset current losses onto previous tax paid.
  • C is for Cuts to personal tax rates – and also for Cash Handouts to pensioners and some other welfare recipients, in the hope that they will be spent to stimulate the economy.

Finally, it’s worth highlighting the paring back of the changes to Research and Development incentives. Measures that could have badly hit innovative companies have been withdrawn, and a new premium rate of R&D incentive introduced.

With the rough and rugged path ahead for Australian businesses, the emphasis of this Budget is very much on a business-led recovery from the economic disturbance caused by the novel coronavirus.

Read our full report on the Budget here.

Mark Molesworth