The Budget 2021-22 is focused on securing Australia’s economic recovery following the pandemic.
The Budget has capitalised on the better than expected results of 2020-21 and spent big on business and reductions to low income personal tax, aged care and training and other programs that aim to create another 250,000 jobs by the end of next year. It seems that 6% unemployment is not good enough and the Morrison Government is targeting 4.75%.
The key drivers that provided the Federal Government with an additional $104 billion were higher than expected tax receipts which arose from our economic recovery being stronger than previously forecast and record iron ore prices. The Budget has taken $96 billion and sent it straight back into extra spending and tax breaks.
Whether this is a pre-election budget or not, it represents a budget focused on stability and recovery.
A number of the COVID-19 business measures aimed at stimulating economic expansion have been continued.
While the economy is expected to grow next year by 4.5%, interest rates will continue to be very low and wages are expected to continue to rise at modest rates.
Not unexpectedly, no major changes to tax policy have been considered.
