It’s the sort of budget no Treasurer wants to deliver: a deficit of $213.7 billion and no clear end to the economic devastation in sight.
But Treasurer Josh Frydenberg has delivered a budget with one clear goal: steer Australia out of its first recession in 30 years, and do that through delivering jobs.
Also read: Federal Budget 2020: What it means for you
But has the 2020 Budget delivered for you? Here are the winners and losers:
2020 Budget Winners
It’s the crowning jewel of the 2020 budget and hardly comes as a surprise: the Government is bringing forward tax cuts originally scheduled for July 2021 in a $17.8 billion move.
This is one phase of the Government’s three-step tax overhaul plan, announced in the 2019 Budget. The first stage delivered tax offsets of up to $1,080 to average income earners.
The second stage, originally scheduled for July 2022, sees the 19 per cent threshold increase from $41,000 to $45,000 and the 32.5 per cent threshold jump from $90,000 to $120,000.
This stage is being brought forward, to begin immediately. The tax cuts will be backdated to 1 July 2020.
Additionally, the Government plans to keep the low- and middle-income tax offset for another year.
That means Australians earning $120,000 or more will get $2,745 back, those making $80,000 will get $2,160 back and those earning $40,000 will get $1,060 back.
The third stage is still due to come into place from July 2024 and sees the 32.5 per cent threshold increased all the way up to those earning $200,000.
Aged, disability, carer and family welfare recipients will receive $500 over two $250 cash payments set to be paid in December 2020 and March 2021.
The Government plans to create 100,000 apprenticeships through its $1.2 billion apprenticeship package. This package sees the Government pay half the wages of a new apprentice taken on by a business, with Finance Minister Mathias Cormann explaining he hopes the package will significantly boost the number of new apprentices.
Employment Minister Michaelia Cash said the package extends beyond trades to include new apprentice hairdressers, carpenters, tradies, chefs and arts workers.
First home buyers
Another 10,000 first home buyers will have access to the First Home Loan Deposit scheme under a fresh extension. That means first home buyers snapping up a new or newly built home will be able to access loans with deposits as small as 5 per cent. The Government will guarantee up to 15 per cent of the loan.
Around 20,000 first home buyers have already accessed the scheme.
Under the extension, buyers will be able to purchase more expensive properties with the caps lifted to $950,000 for Sydney, $850,000 for Melbourne and $650,000 for Brisbane.
This kicks in from Tuesday night to 30 June 2021.
Businesses with turnover of up to $5 billion will be able deduct the entire cost of eligible depreciable assets.
“It's a game-changer and it will unlock investment,” Frydenberg said.
“It will dramatically expand the productive capacity of the nation and create tens of thousands of jobs. A trucking company will be able to upgrade its fleet. A farmer will be able to purchase a new harvester.”
Businesses with a turnover up to $5 billion will also be able to claim back tax paid prior to coronavirus in a bid to offset coronavirus losses. This includes the 2019–20, 2020–21 and/or 2021–22 financial years.
Small business owners
The Budget includes $112 million changes to fringe benefits tax designed to support small and medium sized businesses and 1.5 million Australians who run them.
Training and reskilling provided by employers for workers who then were made redundant or moved into a different role will be exempt from fringe benefits tax.
Additionally, fringe benefits tax will not be applied to work phones, free car parking and laptops provided to small business staff.
The small business entity turnover threshold will lift from $10 million to $50 million for 10 different concessions.
The Government will pour an extra $1.5 billion into six manufacturing sectors over the coming four years.
The space and defence industries, medical products, food and beverage manufacturing, clean energy and recycling and resources technology and critical minerals processing have been chosen as the priority sectors.
The cash will be channelled to major projects which boost collaboration, supply chain integration and turning concepts into products will receive up to $1.3 billion in grants with cash also targeted at identifying supply chain vulnerabilities.
The Budget contains several programs for regional Australia.
A new $100 million Regional Recovery Fund will target areas ravaged by drought, bushfire and coronavirus-led border restrictions, along with areas with potential for economic diversification.
This includes the Snowy Mountains, Hunter-Newcastle and Parkes regions in NSW, Gippsland in Victoria, Cairns, Gladstone, the tropical north and Mackay-Isaac-Whitsunday in Queensland. The entire state of Tasmania is eligible, along with South Australia’s Kangaroo Island and South West Western Australia.
Another $30 million will be put towards local telecommunications projects under the Regional Connectivity Program, and $5.7 million will be spent on helping develop local leaders. That includes local councillors, community organisation members and volunteers.
Then there’s the $50 million Regional Recovery initiative, which is designed to help businesses that have traditionally leant on international tourism.
The Budget also includes $200 million for the Building Better Regions fund to improve infrastructure in regional Australia. Half of that money is dedicated to tourism infrastructure.
2020 Budget Losers
The Budget does not contain any new programs for refugees, with Morrison ruling out new schemes. As it stands, there are two schemes tailored to support 18,000 people who arrived by boat prior to 2014. Asylum seekers can stay for three years on temporary protection visas and those on the safe haven enterprise visa allows people to study or work in regional Australia for five years before applying for a permanent residency visa.
"You don't need to fix something that is not broken. There is already a mechanism there to provide for that," Morrison told the National Press Club in Canberra last week.
The Budget is devoid of JobSeeker updates or changes to the rate of payment, as Finance Minister Mathias Cormann flagged on Monday.
"We have already said that the ongoing arrangements in relation to JobSeeker payments will be announced later this year," Senator Cormann told the ABC.
"We will be making those decisions after we have had the opportunity to further assess how the economy recovers and how many people and to what extent people are able to get back into work."
Jobless Australians older than 35, particularly women
Australian women made up the majority of those who lost their jobs during the crisis, said Mr Frydenberg during his speech.
The Government estimates the JobMaker Hiring Credit will place 450,000 young Aussies in jobs, but with its 35-year age cap on eligible workers, those 36 and older are out of luck.
The Government’s $240 million women’s package also supports a relatively small 500 cadetships for women entering the science, technology, engineering and mathematics fields.
Faced with a nauseating share market and plummeting interest rates, self-funded retirees are in challenging times. However, there was nothing in the Budget for self-funded retirees.
Lazy super funds
Bad news for fat cat funds: the Budget contains several strategies designed to cut down on unintended sets of fees.
Workers who change jobs will automatically bring their current super fund with them, to prevent multiple funds being set up for one person. Australians will also have access to a new YourSuper comparison tool which shows how their super stacks up.
Funds will also need to undergo a new annual performance test and tell their members if they fail it. Should they fail two consecutive tests, they will not be allowed to admit new members until their performance improves.
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