We all understand that budgets are an exercise in predicting the future. Given what has happened in 2020, gazing into the crystal ball and extracting something reliable is fraught with difficulty.
The Treasury has given its best estimate, but we also need to appreciate that budgets are usually never 100% on target — that’s the nature of budgets. The question is, by how much? It will be remembered as Australia’s biggest spending budget with a forecast deficit of $214 billion for the 2021 fiscal year.
The big news for business is the temporary full expensing of capital assets. From now until 30 June 2022, businesses with turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed.
As expected, the adjustments to tax rates that were originally due for implementation in the year ending 30 June 2023 have been brought forward to apply from 1 July 2020.