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September 29, 2020

Why you should care about the Federal Budget

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Alf Couceiro
Why you should care about the Federal Budget

While the federal budget is yet to be released, a few ministers have let slip about some policy changes we can expect come 6 October.

It can be expected that this budget will be one of the most important budgets in recent years, as it will reveal the Government’s plan to assist the nation through the recession. The first formally announced economic downturn in 30 years.

The budget is expected to be in a total deficit of around $281.4 billion, comprised of $85.8 billion for the 2019-20 financial year and $184.5 billion for the 2020-21 financial year, the largest debt since World War ll.

Treasurer Josh Frydenberg has said that the budget will focus on economic recovery and creating jobs.

So many may view the budget as a dry topic. No point in taking note of the announcements. However, it has the potential to touch each Australian’s life. After all, who will they collect the deficient from and when will they start?

Here’s how the Federal budget may affect you:

Tax Payers

It has been speculated that tax cuts will be seen earlier than expected, following news that Australia is now in its first recession in 30 years.

Tax cuts were scheduled for 2022 with the 19 per cent tax rate threshold expecting to increase from $41,000 to $45,000. The 32.5 per cent tax threshold would have increased from $90,000 to $120,000.

Why introduce tax cuts when the Government are in a budget deficient? The idea behind tax cuts is to put more money in people’s pockets, encouraging them to spend and consume more.

Parents

The Federal Government has pledged $305 million towards childcare, with particular assistance for Victorian’s as they continue to battle their second wave of COVID-19 outbreaks.

The support package will see the activity test, which determines how many hours of subsidized care parents receive, relaxed until 4 April 2021.

What else has been discussed?

  • Aid for young Australian’s has been named a priority, as many young Australian’s are facing unemployment due to the COVID-19 crisis.
  • Pensioners are set to receive a cash boost, although the amount has not yet been specified.

Is the budget really that important?

This year’s federal budget can be expected to reveal so much more about how Australia will handle the continuing economic damage from COVID-19. And how the country will use Government spending to aid the country in recovery.

Do you know how the Federal Budget announcements will affect you?

Now that the Federal Budget 2020 has been announced, you may be asking yourself, how will these changes affect me?

We’ve put together all of Budget information in one place, and included our live webinar recording where our experts discuss the key changes and possible implications and opportunities for you post-announcement.

WATCH NOW

Our Modoras team of professionals are here to support you during these challenging times. For assistance on how Government schemes may affect you and your business, call us on 1300 888 803 or click here to book an obligation free appointment.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (VIC) Pty Ltd ACN 145 368 850. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (VIC) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (VIC) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (VIC) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (VIC) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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