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2020-21 Federal Budget Bulletin by Mazars

Mazars debriefs on the government's stimulus package for the 2020/21 Federal Budget.

In order to revive an economy devastated by natural disasters and the global health pandemic of COVID 19, the 2020-2021 Australian Federal Government budget provides stimulus measures.

As of today, the government is projecting a record deficit of $213.7 billion (11% of GDP) and gross debt of 44.8% of GDP for the 2020-2021 budget period. These figures are not fixed, additional deficits will be added over the forecast period, but are projected based on the development and deployment of a COVID-19 vaccine towards the end of 2021. In order to achieve this, the government plans to first stabilize the economy and then reduce the debt.


What stimulus measures:

  • Investments in infrastructure, education, and workforce training,
  • Encouragement to hire young people through a JobMaker hiring credit,
  • Support for investment in manufacturing and research
  • Development and encouragement of companies to spend through significant tax incentives.



  • Changes to tax rates;
  • Low income tax offset (LITO) tax cuts brought forward;
  • Low and middle income tax offset (LMITO) retained for FY2021; and
  • CGT exemption for granny flats.



  • Small business threshold extended to businesses with an aggregated turnover of up to $50 Million (from $10 Million) for certain concessions;
  • Instant asset write-off for depreciating assets acquired after 6 October 2020;
  • A temporary company loss carry-back mechanism will be introduced for companies with aggregated turnover of <$5 Billion;
  • Victorian Government tax-free business support grants;
  • The Research and Development (R & D) tax incentive rules will be enhanced to encourage more investment in R & D;
  • Technical amendments will be made to the corporate residency test;
  • The Government will “prioritise refurbishing Australia’s treaties with key strategic partners";
  • An FBT exemption for retraining and reskilling workers; and
  • The ATO will simplify FBT record keeping for businesses.




For the first time in several years there was a welcome respite for Self Managed Superannuation Funds (SMSFs) with no changes announced.  However, the Government did announce a “Your Future, Your Super” package with the intent to reform superannuation so that it works harder for Australians.


The four measures in this package are: 

  • Stapled superannuation accounts;
  • 'YourSuper' portal;
  • Increased benchmarking tests on APRA funds; and
  • Strengthening obligations on trustees of large APRA funds.



  • JobMaker hiring credit to encourage businesses to take on additional employees;
  • Apprentice subsidy providing support of 50% of wages for 100,000 new apprenticeships or traineeships
  • Insolvency reforms to allow small business to quickly and efficiently restructure

Source: MAZARS

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