Financial Institutions and Markets

Here we are again with the 2021-22 budget being handed down by Treasurer Josh Frydenberg overnight. It feels like an eternity ago that the last budget was being handed down during the midst of the COVID-19 crisis, and this budget is a reflection and continuation of how Australia has fared during its road to economic recovery.

Overall, the anticipated deficits have not materialised, mainly as a result of higher than anticipated employment levels coupled with the strong iron ore prices of the past year. This has resulted in a stronger tax base and has provided the Government an opportunity to prepare a largely politically-focused budget as it heads towards the next Federal Election.

From a tax perspective, there were no radical or comprehensive changes. Rather, the government has targeted the continuation and extension of recently announced or expiring concessions and incentives. The main measures included:

• Extension of the temporary full expensing measures;
• Extension of the tax loss carry-back rules;
• Extension of the LMITO (low & middle-income tax offset);
• Removal of the $450 minimum monthly wage in respect of the superannuation guarantee; and
• Simplification of the Employee Share Scheme rules.

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