The Treasurer handed down the Federal Budget for 2021-22 yesterday, labelling it a “jobs budget” with a focus on “Securing Australia’s Recovery.”
Here’s everything you need to know about the Budget as a whole, and what is most relevant to strata, including:
The Big Picture – Australia’s economy in 2021-22
Insurance, resilience and disaster programs and funding
HomeBuilder and other housing stimulus
Small business stimulus and tax breaks
Individual tax breaks
Other new spending measures
The Big Picture – Australia’s economy in 2021-22
The economy is set to grow by an impressive 4.5% in 2021-22.
The budget deficit will be large, at $80bn, or 7.8% of GDP, but smaller than last year.
Unemployment is predicted to be as low as 4.75% by mid-2023.
International arrivals and overall population growth will remain subdued.
Insurance, resilience and disaster programs and funding
After nearly a decade of advocacy by SCA, Northern Australian MPs and mayors and many property industry stakeholders, the Federal Government announced a $10 billion reinsurance pool and $40 million Strata Title Resilience Pilot Program for residents and owners affected by weather events in Northern Australia.
In addition, $600 million will be set aside through the National Recovery and Resilience Agency to oversee mitigation and forward planning activities to combat disaster throughout Australia.
SCA will be working closely with and advising government on the strata industry perspective for each of these programs to try to get the best outcomes for what can be extremely complex applications of government legislation, regulation and insurance complexities.
The proposed measures in full:
$1.2 billion over five years to improve Australia’s capability to prepare for, respond to, and recover from natural disasters.
$600 million towards disaster preparation and mitigation programs through the newly established National Recovery and Resilience Agency (NRRA).
$40 million to make strata buildings in northern Australia more resilient to extreme weather events. starting with $8m 2021-22, $20m for 2022-23, and $12m for 2023-24.
Underwriting the $10 billion reinsurance scheme for cyclone and related flood with the program up and running by July 2022.
HomeBuilder and other housing and property stimulus
The popular HomeBuilder program has been extended for a further 12 months after receiving 120,000 applications so far and supporting more than $30 billion in residential construction, with off-the-plan apartments and townhouses eligible if construction commenced after 4 June 2020.
SCA has advocated strongly on HomeBuilder and the extension is welcome, especially in its application to new, off-the-plan apartments and townhouses.
We maintain our position, however, that the substantial renovation component for projects of more than $150,000 should be extended to common area and long-term maintenance projects and will continue to make representations to government on this position.
The proposed measures in full:
HomeBuilder to be extended by 12 months.
First home buyers will be able to withdraw $50,000 from superannuation to contribute towards a deposit, provided that they reside within the property they buy – this amount has increased from $30,000, due to rising property prices since the scheme began in 2017.
An additional 10,000 places on a home loan guarantee scheme, with people able to contribute a 5 per cent deposit on a property with partial government mortgage support, with the remaining 15 per cent guaranteed by the government.
10,000 single-parent families will be able to contribute a 2 per cent deposit on a home, with a guarantee for the remaining 18 per cent to be supported by the government.
Small business stimulus and tax breaks
Small businesses with a turnover of up to $5 billion will be able to write off the full value of any eligible asset like a work vehicle or equipment they bought between last budget and June 30, 2023.
The extension also mean any losses incurred up to June 2023 can be offset against prior profits made going back to the 2018-19 financial year. This is an extension of the similar budget measure last year.
Simplified liquidation and restricting rules to be introduced.
Boosting Apprenticeship Commencements (BAC) program sees an extension to 31 March 2022.
Individual tax breaks
The temporary end-of-financial year tax rebate for low and middle-income earners ($1,080 for singles and $2,160 for dual-income couples earning up to $90,000 per year), will be extended in this year’s budget.
The eligibility criteria remains the same as last budget and is expected to produce approximately $8bn in new tax cuts.
Other new spending measures and key information
Employment
Goal of reaching unemployment levels below 5 per cent before any attempts at budget repair are undertaken in the future.
The employment rebound from last year’s technical recession has exceeded estimates made in September 2020, with unemployment reaching 5.6 per cent in March 2021, below the original target of 6 per cent.
Infrastructure
There will be at least $10bn in additional infrastructure spending over the next 10 years, with major road and rail projects in the spotlight.
Other new measures
$31bn across the NDIS, Aged Care and mental health and suicide prevention
$1.7bn investment in childcare
$350m health and wellbeing measures
$3.4 billion to boost women’s economic security and safety including support for single mum’s to enter the property market.
The Federal Government webpage with details of all the budget papers can be located here.
To see the SCA (WA) Media Release, please visit our Advocacy page.
If you have any questions about the 2021-2022 budget, or would like to contact SCA about policy and advocacy activities, please contact Shaun Brockman, National Policy Manager at shaun.brockman@strata.community