We believe the government has produced a budget which has met its core objective to stimulate spending and avoid material drops in employment rates post the COVID-19 based measures such as Job Keeper. We have provided a comprehensive summary of the key tax and superannuation based initiatives and encourage clients and friends of the firm to touch base with us to take advantage of the many planning opportunities.
For a PDF summary of these key points, please click here.
Individuals
Tax Cuts
The second stage of tax cuts for low to middle income earners have been bought forward from the legislated date of 1 July 2022 and will be back dated to 1 July 2020.
These tax cuts lift the top threshold of the;
– 19.0% tax bracket from $37,000 to $45,000
– 32.5% tax bracket from $90,000 to $120,000.
The low-income tax offset has been increased to a maximum of $700.
The low to middle income tax offset, maximum of $1,080, has been retained for the 2020-21 financial year.
The table below details the tax savings an individual can expect to receive:
Payments for Income Support Recipients
Two separate additional cash payments of $250 will be received by eligible income support recipients, such as those in receipt of the Age Pension, and concession card holders. With the first payment expected to be received at Christmas this year and the second payment in March next year. This is in addition to the payments already received.
Businesses
Instant asset write-off
The instant asset write-off scheme introduced during the COVID19 pandemic will be extended.
From 7.30pm (AEDT) on 6 October 2020, Business with a turnover up to $5 billion will be able to write off the full cost of eligible depreciable assets of any value purchased (in the year they are installed) for the next 2 years to 30 June 2022.
