With the federal budget now released, we take a look at the key elements and break them down into an easy to digest summary. We will take a look at :

Tax Advantages

Economic Outlook

Industry Targeted Funding

Let’s begin with the tax advantages.

Tax Advantages

Personal Income Tax Cuts:

  • Brought forward effective from 1st July 2020
  • Low Middle Income Tax Offset (LMITO) extended for the 2021 Financial Year
  • Low Income Tax Offset (LITO) increased from $445.00 to $700.00

income tax bracket schedule updated for 2020 budget

Loss Carry-Back for Companies:

  • 2020 – 2022 Financial Years, tax losses are able to be used to offset earlier taxable profits
  • Limitation to the amount that can be refunded, applicable only to the amount of taxed profits

Note :

Eligible Companies – aggregated turnover of less than $5 billion

Consideration due to the large losses, caused by the application of the instant asset write off

Extension of Apprenticeship Wage Subsidy:

  • New Australian Apprentices from 5th October 2020 – 30th September 2021
  • Limitation 50% subsidy limited to $7,000 per quarter
  • Claims to start from the 1st January 2021

Instant Asset Write Off:

  • Complete deduction of newly acquired assets from 6th October 2020 – 30th June 2022
  • Extended to businesses with an aggregated annual turnover of less than $5 billion

instant asset writeoff guide

JobMaker Hiring Credit:

  • Introduced from the 7th October 2020 over the next 12 months
  • Program to make claims to begin from the 1st February 2021
Eligible Employees Amount Receivable
Aged 16 to 29 $200 per week
Aged 30 to 35 $100 per week

Employee Eligibility :

  • Work at least 20 Hours per week
  • Employment commenced between 7th October 2020 – 6th October 2021
  • Employee received a Centrelink payment for at least one month within the past three months before employment
  • Must not also be under the ‘Apprentice Wage Subsidy’

Employer Eligibility :

  • ABN
  • Up to date tax obligations
  • Registered for PAYG Withholding
  • Using Single Touch Payroll
  • Reference to increase in headcount, based on September 2020 Quarter
  • Eligible Employee
  • Records of eligible employee employment kept

Ineligible Employer :

  • Commonwealth, state and local government operated entities
  • Entities in liquidation or bankruptcy
  • Employers claiming JobKeeper Payment
  • Employers subject to the major bank levy

Research & Development Tax Incentive:

  • Introduction in the 2022 Financial Year

Granny Flat CGT Exemption:

  • Introduction in the 2022 Financial Year
  • Limitation – Condition of application, must be applied to familial ties (Not Commercial)

Extension of Small Business Tax Concessions:

  • Aggregated turnover requirement changed from less than $10 million to less than $50 million
  • Gradual implementation until the 2022 Financial Year

Economic Outlook

Situational Scenarios :

  • Positive – COVID-19 Vaccine
  • Negative – COVID-19 Outbreaks

Households :

  • Fell by 12.1% in the June 2020 Quarter
  • Expected to recover, however to remain slightly lower than pre-COVID-19 levels

Business Investment :

  • Fall by 9.5% in the 2021 Financial Year
  • Deterioration in non-mining investment – driven by decline in machinery and equipment investment

Public Final Demand :

  • Forecast to grow by 5.75% in the 2021 Financial Year

Industry Targeted Funding

Modern Manufacturing Strategy ($1.3 billion):

National Manufacturing Priorities

  • Resources Technology & Critical Minerals Processing
  • Food & Beverage
  • Medical Products
  • Recycling & Clean Energy
  • Defence
  • Space

Modern Manufacturing Initiative

  • Manufacturing Collaboration Stream – support business to business and business to research collaboration
  • Manufacturing Translation Stream – support manufacturers in translating ideas into commercial products
  • Manufacturing Integration Stream – assist with accessing the local and international markets

Infrastructure Investment:

Targets the construction of roads and rail projects

$12.5 billion investment into infrastructure :

  • Queensland – $1.3 billion
  • New South Wales – $2.7 billion
  • Australian Capital Territory – $155.3 million
  • Northern Territory – $189.5 million
  • South Australia – $625.2 million
  • Western Australia – $1.1 billion
  • Victoria – $1.1 billion
  • Tasmania – $359.6 million

National Programs :

  • National Water Grid – $2 billion
  • Local Roads & Community Infrastructure – $1 bilion
  • Road Safety & Upgrades – $2 billion


  • Agriculture Workforce
  • Push to encourage school leavers to undertake agricultural work
  • Provide benefits to attract both domestic and foreign workers (Working Holiday Makers)
  • Drought
  • Infrastructure
  • Competition


  • Aimed to assist first home buyers

Other Targeted Funding:

  • Investment in new energy (low emission) technology
  • Australian waste management (Recycling)
  • Support for regional Australia
  • Commonwealth Scientific and Industrial Research Organisation (CSIRO) – supporting scientific research to be applied into commercial activities

The Insights published on our website have been written by our professional staff strictly for educational purposes. Please note that the information and views expressed above do not constitute professional advice and are general in nature only.

Other Insights from Pherrus

  • blank

    Empowering Schoolgirls to Become Champions

    Fostering Young Talent in Fiji Through the Power of Sponsorship Every day, 17 year old Vaciseva Bukanidawa travels by truck from her mother’s village of Rewasau to Wainimala Secondary School. For almost two years, she has been representing her school in the National Rugby League as a key player for the Wainimala Raiders. Breaking Down…

  • Fringe Benefits Tax on Novated Leases

    Understanding Fringe Benefits Tax and Novated Leases

    Whether you’re an employee eyeing a new car or an employer striving to boost your team’s morale, understanding novated leases as a fringe benefit and the associated tax is crucial.  Why?  Because it can lead to significant financial advantages and benefits for both employees and employers. Let’s find out more about novated leases, calculating their…

  • Fringe Benefits Tax Rate

    Fringe Benefits Tax Rate: What You Should Know

    Whether it’s a “buy nine, get the 10th coffee free” deal, happy hour, or a 12-month gym membership for the price of 11, we all love a perk!  Fringe benefits are non-cash perks employers can offer sought-after prospective employees to make an employment position more desirable. But, there’s a catch- the Fringe Benefits Tax (FBT). …