The Government has delivered the 2021-2022 Federal Budget (Budget) with Treasurer Josh Frydenberg announcing it as the ‘recovery budget’, getting people back to work.
From a business perspective, the emphasis of this Budget is very much on recovery and rebuilding to boost economic activity and drive down unemployment levels. Tax measures have featured heavily.
Currently, the economic outlook is better than anyone dared hope at the height of the pandemic just a year ago, but challenges remain.
Unemployment, at 5.6%, has already fallen below pre-pandemic levels and is expected to fall sharply to 5% by mid 2022. But wage growth remains stubbornly low, currently growing at rate of 1.25% and forecast to rise by just 1.5% next year. This is well below inflation which is forecast to rise 3.5% in 2020-21 and 1.75% in 2021-22.
The Treasurer forecast a budget deficit of $161 billion this financial year (7.8% of GDP), $52.7 billion less than expected just six months ago, and $106.6 billion (5% of GDP) in 2021-22.
Net debt is forecast to increase to $617.5 billion (30% of GDP) by June this year before peaking at $980.6 billion four years from now.
Our Budget summary outlines the key accounting and tax impacts from a personal and business perspective and what they mean for you. You can read it in full by clicking the button below.
Tax related measures summarised:
Superannuation and related measures summarised:
The Budget did not contain any change to the legislated Super Guarantee rate increase from 9.5% to 10% for 2021-22.
Our Federal Budget summary helps you navigate the accounting and tax details for personal and business that will impact you.
Please contact our team if you have any questions in relation to the Budget and how it impacts you or your business.
AFS & Associates Chartered Accountants
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