The 2020-21 Federal Budget is a road to recovery paved with cash.
Key initiatives include:
The Budget also contains two additional Economic Support payments to pensioners and other eligible recipients to drive money back into the economy.
By comparison to many, Australia has managed the COVID-19 pandemic well, but good management isn’t enough to protect us from the $213.7 billion deficit in 2020-21. The Government has taken to heart the old adage, “You have to spend money to make money” to trade our way out of a black hole.
Some of the measures are aimed at addressing the harsh lessons COVID-19 has taught us and seek to centralise production back in Australia to ensure our industries can be self-reliant.
Outside of the big ticket tax measures, what is striking about this Budget is the sheer volume of initiatives it funds - too many to itemise
in this update. Many of the initiatives aim to improve how Government interacts with the community and business in particular. This funding
is focussed on streamlining interaction and compliance with Government requirements and investing in the IT infrastructure required to
digitise the compliance process.
The final comments in the Treasurer’s Budget speech paint a cautionary tale. The focus right now is on the path to growth and stabilising debt in an effort to boost consumer and business confidence. However, once “recovery has taken hold and the unemployment rate is on a clear path back to pre-crisis levels” of below 6%, the second phase will kick in - the deliberate shift from providing temporary and targeted support to stabilising debt.
Reflecting on the past 6 months, particularly since the effect of Coronavirus on financial markets, I am concerned that many investors do not have a clear and tailored investment strategy. My observations are that investors seem to be failing to understand one basic investment principle; 'The higher the return the higher the risk’.
The updated alternative tests released by the Commissioner of Taxation are broadly similar to the alternative tests that were released in connection with the original decline in turnover test. However, there are some key differences.
To access JobKeeper payments from 28 September 2020, there are three questions that need to be assessed:
Is my business eligible? Am I and/or my employees eligible? and What JobKeeper rate applies?
We’ve summarised the key details in this update.