Federal Treasurer Josh Frydenberg has unveiled the Morrison government’s annual Budget, which pledges billions of dollars for tax cuts, infrastructure, manufacturing, wage subsidies, and stimulus measures.
Amid the coronavirus pandemic, Australia’s debt ceiling has also been raised to $1.1 trillion, with the Budget forecasting debt peaking at $213.7 billion – 11 per cent of GDP – this financial year.
One of the main aspects of the Federal Budget is the acceleration of tax cuts, with stage two of the Personal Income Tax Plan to be backdated to 1 July 2020, built into wages until the end of this financial year, along with the additional benefit of a one-year extension to the low- and middle-income tax offset.
As explained by ABC News, it means people who earn between $45,000 and $90,000 will end up with an extra $1,080. While people earning more than $90,000 will take home up to $2,565 extra.
Interestingly, Australian travel industry peak bodies, including Tourism Accommodation Australia and the Australian Hotels Association, welcomed the tax cuts, which multiple outlets note benefit the richest in our society the most, and progressively less for those on lower incomes.
Another key element of the Budget is the JobMaker program, which includes billions of dollars towards previously flagged infrastructure, manufacturing, apprenticeships, and changes to university funding (like increasing the cost of humanities degrees).
Alongside this comes the creation of immediate JobMaker hiring credits, which will give $200 a week to employers who hire anyone aged 16 to 30, and $100 a week for any worker aged 30 to 35.
However, as Crikey noted, the JobMaker hiring credit excludes anyone who lost their job during the COVID-19 pandemic aged over 35.
To be eligible for the credits, employees must have been on JobSeeker and be given at least 20 hours of work a week. All businesses except for the major banks will be eligible.
The Morrison government expects this will create 450,000 jobs for young people and will be available for businesses for up to a year.
Specific to eco-tourism operators, recreational fishers and marine life is a $61.7 million environment and heritage package, which ABC News explained comes from the $1 billion COVID-19 Relief and Recovery Fund, and also targets communities affected by the bushfires.
Additional support in the Budget for tourism operators, which the national broadcaster neither categorised as a “winner” or “loser”, includes:
- $51 million over two years for regions that rely on international tourism to diversify their markets
- $3.3 million for relief to businesses in the Great Barrier Reef Marine Park, and
- $2.2 million to help the Reef HQ Aquarium in Townsville continue its core functions and maintain staff during its temporary closure.
Furthermore, as of Tuesday night, the number of Medicare-funded psychological services has been doubled from 10 to 20.
According to ABC News, the government hinted more announcements would come once it releases the Productivity Commission’s reports on mental health and suicide, in the coming weeks.
While there are very clearly winners and losers in this Budget, multiple commentators have asserted that it relies on the assumption that a population-wide Australian COVID-19 vaccination will be in place by late 2021.
Commenting on the Budget’s release, the Australian Federation of Travel Agents (AFTA) noted that a full recovery of the travel sector will only be possible once international travel resumes “and normalises”.
“Until this happens, the sector is asking for the first time for government support in the form of a $125 million federal support package plus state and territory government support which AFTA will continue to lobby on,” the industry body said.
However, AFTA welcomed the decision to allow current year losses to be carried back, which it said was a key recommendation in the federation’s pre-Budget submission.
Additional increased investment in mental health, including suicide prevention, was welcomed by the federation as “critical for so many sectors in these incredibly difficult times”.
“We are currently examining the details of the wider Budget and its impact upon the industry and continue to work with the government closely on developing a sector-specific package,” CEO Darren Rudd said.
Tourism Accommodation Australia (TAA) said measures like the direct wage subsidy scheme, JobMaker hiring credits, and instant asset write-off would have an immediate boost for large, medium, and small accommodation venues.
“It is pleasing to see the federal government has listened to our concerns,” TAA chief executive Michael Johnson said.
Johnson also welcomed the new subsidies for apprenticeships, saying that the sector would need “more than 16,000 chefs” over the next five years.
“This new subsidy … will hopefully see hundreds of new apprentices and trainees come into our industry as we work on our road to recovery,” he said.
However, the Budget was not welcomed by federal Opposition Leader Anthony Albanese, who hit out at the plan to keep JobSeeker at around $40 per day, and the Morrison government’s lack of a plan for social housing, clean energy, childcare, and aged care.
According to The Guardian, Labor will back the stage two tax cuts.
Greens leader Adam Bandt, who also echoed Albanese’s complaints, said his party would fight the Budget’s “tax handouts to the super-wealthy with everything we’ve got” and hoped Labor would join it, instead of voting with the Coalition again.
Featured image source: iStock/kokkai