Federal Budget Update 2021

The Federal Budget was handed down last night by the Treasurer, the Hon Josh Frydenberg. The Treasurer’s overarching budget announcements targeted the following key areas:

• Personal income tax cuts
• Business tax incentives
• New apprenticeships and training places
• Infrastructure spending
• Increased funding for schools, hospitals, aged care, mental health and the NDIS

These investments and fiscal policies are expected to further increase business confidence, achieve record-low unemployment rates, and maintain increased consumer spending. The result of such policies will see Australia’s economy continue to grow and exceed pre-pandemic levels.

Due to Australia’s response to the pandemic, Treasury are forecasting unemployment to fall to 5% in the middle of 2022, before falling further to 4.75% in the middle of 2023. The unemployment rate has only ever fallen below 5% once in history, in the early 1970s.

Finally, over the next four years, Treasury expects the deficit to nearly halve as the economy improves. The underlying cash deficit in 2021‑22 is projected to be $106.6 billion (5.0% of GDP). Furthermore, this is expected to improve over the forward estimates to a $57.0 billion deficit (2.4% of GDP) in 2024‑25.

Although, if the pandemic has demonstrated anything, expect the unexpected.

 Click here to learn more about the 2021-22 Federal Budget announcements.