2021-22 Budget recap – Bookssorted

The 2021-22 Budget address largely met the expectations of a budget focused on economic participation to ‘Secure Australia’s Recovery’.
As the Federal Government’s Budget website says: The 2021-22 Budget maintains the momentum of Australia’s economic recovery. It supports jobs and guarantees services and is the next stage of the Government’s economic plan to secure Australia’s recovery.
For our Bookssorted contractors, this means an increase of jobs with a $1.2 billion investment in the Digital Economy Strategy, which aims to build digital skills and capabilities; encourage business investment; and transform government services.
For some contractors, the Budget delivers personal income tax cuts, reduced tax burden when depreciating intangible assets and claiming education expenses, home ownership incentives and childcare cost savings.
It also delivers significant funding for IT projects across government.
The Budget also has a specific focus on women’s safety, women’s health and women’s economic security; acknowledging a great need for investment in measures that support women to be safe and to fully participate in our economy.
Below is a summary of the Budget measures that took our interest.

Tax cuts

Personal income tax: To support household income and create more jobs, the Government will deliver an additional $7.8 billion in tax cuts by retaining the low- and middle-income tax offset (LMITO) in 2021-22.

Digital games development: The Government is introducing the Digital Games Tax Offset (DGTO) to promote the growth of the digital games development industry in Australia. Investing in this dynamic and innovative industry will support Australia taking a greater share of the $250 billion global games development market. From 1 July 2022, the DGTO will provide eligible game developers with a 30 per cent refundable tax offset for qualifying Australian games expenditure.
Self-education expenses: The Government is removing the exclusion of the first $250 of deductions for prescribed courses of education. This will simplify the tax return process and reduce compliance costs for individuals claiming self-education expense deductions.
Digital economy strategy—self assess life of intangibles: The Government will allow taxpayers to self-assess the effective life of certain depreciating intangible assets for tax purposes, rather than being required to use the effective life currently prescribed by statute.

Digital Economy Strategy
With the Digital Economy Strategy, the Government acknowledges that greater adoption of digital technology is an important driver of employment, wages and productivity growth. See the Strategy on a page on the Prime Minister & Cabinet website.
Key initiatives include investment in AI adoption, building skills, enhancing myGov, expanding the Digital Identity System, driving the uptake of e-invoicing and accelerating he rollout of the Consumer Data Right.

IT projects

$18.8 million in 2021 22 to pilot centralised delivery of cyber capabilities and services for government agencies through Whole of Government cyber hubs.

$1.8 million over two years from 2021 22 to deliver a National Data Security Action Plan
$36.0 million over four years from 2021 22 (and $1.6 million per year ongoing) to expand the Health Products Portal
$53.8 million over four years from 2021 22 to create a National AI Centre and four AI and Digital Capability Centres
$421.6 million over two years from 2021 22 (and $38.7 million in capital funding) to continue the My Health Record system and funding for the Australian Digital Health Agency
$10.0 million in 2021-22 for the Digital Transformation Agency to support the delivery of the Government’s Digital transformation priorities

$0.9 million over five years from 2020 21 to continue the Ahead for Business digital hub

Child care
The Government is committed to ensuring access to child care by providing $9.7 billion in 2021‑22 to reduce out-of-pocket costs for families. This investment supports over one million Australian families by providing access to affordable child care. An additional $1.7 billion over five years has also been committed in this Budget to further reduce the cost of child care for over 250,000 families with multiple young children in child care and to boost workforce participation.

Aged care
The Government is delivering record additional funding of $17.7 billion for a comprehensive aged care reform package in response to the Royal Commission into Aged Care Quality and Safety.

Home ownership
The Government is acting now to expand the First Home Super Saver Scheme (FHSSS) to ensure more young Australians can achieve the dream of home ownership.
The maximum amount of voluntary contributions that can be released from the FHSSS will increase from $30,000 to $50,000, effective from 1 July 2022. This increase will fast-track home ownership for first home buyers. It recognises that deposits required for home purchases have increased over the years given house price growth.

Mental health
The Government will undertake landmark reform of the mental health and suicide prevention system, with a record $2.3 billion investment in critical services and supports.

Supporting veterans
This Budget provides $460.4 million to support veteran needs, address veteran suicide, and accelerate the processing of compensation claims.

What are your thoughts on this 2021-22 Budget?

* Information sourced from budget.gov.au