On Tuesday night, Treasurer Josh Frydenberg handed down Australia’s 2020 Budget. He opened his speech by saying Australia has been tested like never before with floods, fires, drought and a once in a generational global pandemic.
"The Great Depression and two world wars did not bring Australia to its knees and neither will COVID-19” the Treasurer said.
But this Budget is unlike so many we’ve watched and criticised before. The 2020 Budget was dubbed “the most important Budget since World War II” and was supposed to be the first time the Liberals delivered a surplus—no brownie points to anyone who can guess what really happened off the back of coronavirus.
Instead (and unsurprisingly), the Treasurer announced record-breaking deficit and debt on the trajectory to surpass a trillion big ones by 2024. The “This Is Fine” meme has never felt more pertinent than now.
With Australia’s big 2020 Budget now out, we’re breaking down the major pullouts important to young people and what they mean for you.
Income Tax Cuts
Treasurer Josh Fryenberg kind of had an Oprah moment when he handed down the 2020 Budget (you get a tax cut and YOU get a tax cut). Yep, it’s tax cuts galore.
The Government basically brought forward income tax cuts that were marked to hit midway through 2022, and these tax cuts will be backdated to July 1 of this year (which will impact around 11 million Aussies). This $17.8 billion plan means the ATO will take less tax from your pay, pretty much as soon as your next payslip drops, and this, in turn, will leave you more money to spend (and the Government wants you to inject this back into the economy).
They’ve done this by changing up the earning thresholds—the 19 per cent threshold has gone from $37,000 to $45,000 and the 32.5 per cent threshold has gone from $90,000 to $120,000. These cuts will stick around for the 2020-21 financial year but they’ll go back in 2021-22. To give you a ballpark figure, if you earn $85,000 a year, you’ll save $1080 this financial year, nothing extra from 2021-22 and $1000 from 2024-25.
JobMaker Hiring Credit
Treasurer Josh Frydenberg also dropped a shiny new wage subsidy but there was no mention of a date change for JobKeeper (expected to end 28 March 2021).
It’s called the JobMaker Hiring Credit and this bad boy is specifically targeted towards young people, specifically those who have lost work off the back of coronavirus. It’s also meant to incentivise businesses to employ additional young people.
The credit will subsidise the wages of young employees who are hired, literally from today. The JobMaker Hiring Credit is:
- $200 per week for each eligible employee aged 16 to 29
- $100 per week for each eligible employee aged 30 to 35
There are a few eligibility points to note, for starters, an employer can’t claim JobKeeper and JobMaker Hiring Credit at the same time. Eligible employees also have to work an average of at least 20 hours per week over a quarter for the employer to qualify for the payment.
New young employees also must have been receiving income support payments (such as JobSeeker Payment, Youth Allowance (Other), or Parenting Payment) for at least one of the three months before they were hired.
Mental Health And Suicide Prevention
The Government is blowing out a good $5.7 billion on mental health services and suicide prevention this time around. The focus on mental health funding looks like lifting the number of Medicare-subsided services from 10 sessions a year to a mega 20 per year (woot!).
On top of this, they’re also throwing a whole lot more cash towards the likes of Lifeline, headspace, Black Dog Institute, Beyond Blue and more.
As part of the Government’s economic recovery plan to, you know, “create jobs, rebuild the economy and secure Australia’s future”, the First Home Loan Deposit Scheme has been extended. This basically means an additional 10,000 of you out there will be able to purchase a new home at that sweet five per cent deposit. The additional 10,000 places have been locked for 2020-21 and will support the purchase of a new home or a newly built home. Not massive but better than nothing.
There wasn’t a whole lot on the environment front either. The Government is investing $47.4 million to protect Australia’s oceans and restore its health and is committing $29.1 million to reduce the risk of chemical contamination on Commonwealth land.
About $250 million over four years will be invested to modernise recycling infrastructure, reduce waste and recycle more within Australia as well plus $1.9 billion will go towards renewable tech in order to lower emissions.
You can find the complete Federal Budget 2020-21 here.
And here are all the major JobKeeper and JobSeeker dates you should know about.
Image credit: Mark Williams