After the year that was 2020, the 2021 Federal Budget was much anticipated as to what decisions would be made in relation to the economy going forward. From a business perspective, it is a great relief that the government has chosen to stabilise the ship and not introduce dramatic changes to the tax landscape to allow business to get on with business, as opposed to navigating new legislation requirements.
The extension of many tax benefits will allow business to take a breath and plan their cashflow, business growth and capital purchases.
The main areas for business from the budget are:
Extension to Temporary Full expensing
The extension of the full deduction of the cost of depreciating assets until June 2023 is beneficial to allow businesses to plan for the capital purchases. This will also assist those businesses who are currently restricted due to the limited supply of many assets due to a decrease in supply of assets and an increase in demand. For more information as to how this may benefit your business, please see our recent blog.
Extension to Loss carry back provisions
The loss carry back provisions are not currently a provision we are seeing many businesses being eligible for. However, it is expected that with the extension of these provisions and an increase in confidence by the business community, that it will be beneficial to established businesses undertaking significant capital expansion to assist with cashflow requirements.
Removal of Superannuation exemption for employees earning under $450 per month
The government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid super guarantee contributions by their employer. There has not been any mention to changes for the exemption for staff under 18 who work less than 30 hours per week.
If you have further questions around the 2021 Federal Budget, please do not hesitate to contact us by email or phone the office 07 5451 1118.