“This budget is all about jobs. Tonight, we embark as a nation, on the next stage of the journey,” Mr Frydenberg said in his speech before the House of Representatives.

“There is no economic recovery without a jobs recovery. There is no budget recovery without a jobs recovery,” he said, before acknowledging the government is forecasting net debt will peak at $966 billion – or 44 per cent of gross domestic product (GDP) – by 2024.

While Mr Frydenberg called this debt  “a heavy burden”, he noted it is a necessary one “to responsibly deal with the greatest challenge of our time”.

So what does this translate to and how might it impact the business of law?

Greater tax relief

The government’s efforts to generate economic activity and create jobs are set to be furthered by businesses being supported with “time-limited tax incentives that will provide immediate expensing and loss carry-back”.

As part of this, the Treasurer revealed the government will bring forward Stage Two of its Personal Income Tax Plan, seeing more than 11 million taxpayers get a tax cut backdated to 1 July 2020.

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“It is estimated these measures to reduce the personal income tax burden and encourage business investment will create around 100,000 jobs by the end of 2021-22 and boost GDP by around $6 billion in 2020-21 and $19 billion in 2021-22,” Mr Frydenberg said.

How this works for individuals 

• the low income tax offset will increase from $445 to $700;
• the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000; and
• the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.

“The LMITO was to be removed with the commencement of Stage two, but the one-off additional benefit in 2020-21 will provide support to households and stimulus to the economy.

“Together, bringing forward Stage two and providing the additional LMITO means more than 11 million Australian taxpayers will get a tax cut, with effect from 1 July this year, providing them with more money to spend on what matters to them. As they spend their tax cuts this will help local businesses to keep their doors open and hire more staff.

“More than 7 million individuals are expected to receive tax relief of $2,000 or more for the 2020-21 income year compared with 2017-18 tax settings. Low and middle income tax payers will receive relief of up to $2,745 for singles and $5,490 for dual income families.

“This will reward effort and creates jobs,” Mr Frydenberg said.

How this works for businesses

Following on from the expansion of the instant asset write-up in response to COVID-19, this year’s budget has declared the government will now allow 99 per cent of businesses to write-off the full value of assets they purchase. This means those with a turnover of up to $5 billion “will be able to immediately deduct the full cost of eligible depreciable assets acquired from 7:30pm on 6 October 2020 and first used or installed by 30 June 2022”.

“It will unlock investment, expand the productive capacity of the nation and create tens of thousands of jobs,” Mr Frydenberg explained. 

“...Losses incurred to June 2022 can be offset against prior profits made in or after the 2018-19 financial year.

“The Government is also providing $105 million in tax relief to expand access to a range of small business tax concessions by lifting the aggregated annual turnover threshold for these concessions.

“Businesses with an aggregated annual turnover between $10 million and $50 million will, for the first time, be able to access up to 10 small business tax concessions.

“The expanded concessions will apply in three phases, with the first phase starting from 1 July 2020. The changes will reduce red tape and support around 20,000 businesses to attract workers and retain jobs.”

Job creation

The Treasury has allocated $98 billion towards job creation: $25 billion in direct COVID-19 response measures, and $74 billion in new measures to aid in creation.

“Under our plan, the economy is forecast to grow by 4-and-a-half per cent next calendar year and unemployment is expected to fall to 6-and-a-half per cent by the June quarter 2022,” Mr Frydenberg stated.

This will see almost half a million young Australians supported through a new JobMaker Hiring Credit, and investment in skills and training.

At a cost of $4 billion, the JobMaker Hiring Credit will be payable for up to 12 months for each new job created by Australian businesses – and is available for any employer who hires eligible employees between the ages of 16 and 35.

The Hiring Credit will be paid quarterly in arrears at the rate of $200 per week for those aged between 16-29, and $100 per week for those aged between 30-35, with eligible employees required to work a minimum of 20 hours per week.

Reforms to super

Further, the 2020-21 budget zoomed in on reforms to super.

“The Morrison Government is reforming the superannuation system so that it works harder for Australians,” it was declared.

“Too many Australians are paying too much in super fees,” Mr Frydenberg said, with superannuation fees costing Australians $30 billion per year – more than energy bills ($27 billion) and water bills ($12 billion).

According to the Treasurer, new measures will benefit Australians by $17.9 billion over the next 10 years, which left unchecked, could see Australians paying $45 billion in superannuation fees by 2034.

From 1 July 2021, the “Your Future, Your Super” package will work to prevent the creation of unintended multiple superannuation accounts, make it easier to choose a better fund, hold funds to account for underperformance, and improve transparency and accountability.

Family law and family relationship services

As part of its Economic Recovery Plan post-COVID-19, the government announced it will provide $220 million to support the delivery of critical frontline services for families.

“This includes $133 million towards family and child support programs and $87.3 million towards Family Law and Family Relationship Services,” Treasurer Josh Frydenberg said.

“Building on previous commitments to keep women and children safe and ensuring access to justice, we will provide the Family and Federal Circuit Courts with an additional $10.2 million to manage the impacts of COVID-19.

“The Morrison Government is continuing to guarantee our essential services at a time when Australians need them most.”

Other services set to benefit include the health sector, with the budget delivering what’s being dubbed “record funding” for health, stretching a total of $93.8 billion in 2020-21, marking an increase of almost 43 per cent since 2014-15.

“The Government is committed to supporting the mental health and wellbeing of all Australians, and has invested $5.7 billion in 2020-21, including funding for critical front line services and suicide prevention,” Mr Frydenberg added.

Meanwhile, aged care is set to receive an additional $1.6 billion for an additional 23,000 home care packages across all package levels.

“The number of home care packages will have increased three-fold from around 60,300 in 2013 to around 185,500 in 2021,” the Treasurer said.

“We are committed to delivering quality residential care with a further $11.3 million for training and support for aged care providers and carers of people experiencing behavioural and psychological symptoms of dementia.”

What are your thoughts on this year’s budget? If you’d like to share your thoughts, get in touch with the team via This email address is being protected from spambots. You need JavaScript enabled to view it.