The 2021-2022 Financial Budget and Its Impact on Businesses
The 2021-2022 Financial Budget is designed to help make more jobs, secure essential services, and create a robust and flexible Australian economy. Australia managed its COVID-19 crisis as well as it could and had fewer infections and deaths than many other countries but the economy did dip into a recession for the first time in 30 years. However, the economy has bounced back and is on pace to go back to pre-pandemic levels sooner than expected and employment opportunities are increasing. In today’s blog, we are examining the 2021-2022 Financial Budget as well as discussing its effect on businesses.
Overview of the 2021-2022 Financial Budget
The latest budget looks to bolster Australia’s recovery and position ourselves for a strong future. It does this by providing tax incentives to businesses and individuals, creating new training schemes, and devoting funds to essential services.
The budget includes several items that should make people and business owners happy and keep a bit more money in their bank account. The personal tax offset for the 2020-2021 fiscal year has been carried forward to 2021-2022. Businesses have a variety of tax reforms to take advantage of. Firstly, a one-year extension has been given to the full expensing scheme which allows businesses, with a turnover of up to $5 billion, to claim deductions upfront on assets they implement by 30 June 2023, this includes upgrading any current assets. Secondly, businesses will be granted an extension to the loss carry back provision. Tax losses from the 2019-23 income years are now eligible to offset taxed profits in 2018-19 when the business submits its tax return. Thirdly, the tax rate for small and medium companies was reduced to 25% on 1 July 2021.
Training and apprenticeships
The 2021-2022 Financial Budget seeks to improve the labour force and prepare for the future. The Local Jobs Program, responsible for reskilling and upskilling workers, is marked to receive over $200 million in funding over the next four years. The government also earmarked $1.2 billion for its Digital Economy Strategy which aims to increase peoples digital skills and competence, stoke business investment, and change government services. More funding was also provided to the JobsTrainer Fund to help expand the number of training facilities that provide digital skills and aged care skills courses.
The COVID-19 health response has been extended and more investment has been granted to the vaccination program. More funding was delegated to bettering and expanding mental health care and suicide prevention, as well as funding for ensuring older citizens are treated with respect, care, and dignity. The NDIS is fully funded making it possible to provide support to people with a disability.
Outcomes for Businesses
The 2021-2022 Financial Budget is being received well by small and medium-sized businesses. In addition to the previously mentioned benefits, the budget is also setting aside funds to smooth out the regulatory process for SMEs and make it easier for them to employ people. Businesses will receive tax relief, the budget helps them invest in the digital economy, and it’s easier for them to comply with government regulations. The government is helping SMEs get through the pandemic by making it easier to employ people and simultaneously planning for the future.
It is now easier for people to improve their work skills and abilities which provides a strong benefit to businesses looking to hire new workers or improve their current staff’s talents. Businesses are being encouraged to innovate and provide for everyone on their payroll, making jobs more appealing and getting more people into the workforce. This applies to industries such as IT and medicine as well as construction and tourism so there are plenty of opportunities to take advantage of.
It’s important that when considering to invest in your staff or to grow your business that you have spoken to your HR consultant to highlight the steps to take and create a plan for the future that will place you in the best position possible to achieve success and reach your companies goals.
Looking to maximise your workplace potential?
Bramwell Partners can help you ensure compliance with HR regulations, training, and other workplace issues. Our HR consultants Brisbane team is family operated and have years of experience available to assist you with your HR concerns. If you have any questions regarding how we can help your business, please contact us, we are here to assist you in getting the best out of your team.