Like New Zealand, the economic picture is clouded by COVID, although the Australian Government’s fiscal position is better than what was forecast last year. In particular, Australia’s economic recovery has been buoyed by strong mineral and commodity prices.
The general highlights include:
- significant new infrastructure spending commitments (totaling A$17.9b), mainly transport related
- a transferable 20-week paid parental leave scheme for both parents
- a A$250 cost of living payment to those receiving Government assistance
- reducing red tape for unlisted businesses to encourage use of employee share schemes.
The tax highlights include:
- an extension of the 17% tax rate ‘patent-box’ tax regime announced last year for the Australian medical and bio-tech sectors to also include the agricultural sector and those involved in low emissions technologies
- additional funding for the ATO for its ‘high net wealth taxpayer’ tax avoidance task force to continue to 30 June 2025. This A$600m investment is expected to result in A$2b of additional tax.
- future changes to the instalment tax (“PAYG”) regime for Australian businesses, to enable tax payments based on real-time financial performance
- a 50% reduction in fuel excise for six months from 30 March 2022.
For more commentary on the Australian Federal Budget, from KPMG Australia’s Budget team, please click here.