The 2021-22 Federal Budget has been released. The Main Points include:

Individuals

  • The Low & Middle Income Tax Offset has been Retained for the 2021-22 Financial Year. Continuing this tax offset provides a rebate of up to $1,080 each on lodgement of an Individual Tax Return.
  • $1.7 Billion investment in childcare to help boost workforce participation. Due to this investment, Additional Childcare assistance will only apply to families with more than 1 child and it will commence from 1 July 2022.
  • Modernising the tax residency rules by creating a ‘bright line’ test. The ‘bright line’ test will apply if you spend more than 183 days in Australia and make you a Resident for that Financial Year.
  • First Home Super Saver Scheme amount to increase from $30,000 to $50,000. This is for personal contributions and withdrawal from super to assist with the purchase of a first home.

The forecasted deficit for this 2020-21 Financial Year is $161 Billion. A $106 Billion deficit is expected for the 2021-22 Financial Year. The forecasted deficit is expected to continue to reduce to a $57 Billion deficit in the 2024-25 Financial Year because of economic recovery.

The Net Debt for the Federal Government is expected to increase to $617 Billion this 2021 Financial Year because of Government spending. Net debt is expected to peak at $980 Billion or 40.9% of GDP in the 2025 Financial Year. Gross debt is expected to exceed $1 Trillion due to Government borrowing as a result of covid.

Subsequently, this is a budget aimed at stimulating economic recovery over the next 3 years.

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