On 11 May 2021, the Treasurer the Hon. Josh Frydenberg MP handed down the Commonwealth Budget for 2021-22.
This Budget has a strong focus on housing, skills and training, childcare, NDIS, aged care, mental health, pre-school education, women’s economic security and women’s physical safety.
The following is a general overview of the major announcements relevant to the licensed hospitality and accommodation industry:
Main points:
- International students to work more than 40 hours per fortnight
- Brewers and distillers producer rebate to align with wine producers
- $450 per month threshold for superannuation removed
- Temporary full expensing extended for 12 months
- Temporary loss carry-back extended for 12 months
- Aviation support continues
- JobTrainer extended
- Boosting Australian Commencement wage subsidy extended.
REVENUE MEASURES
Home Affairs
- Migration – Add flexibility for student visa holder to work in the tourism and hospitality sectors
The Government will provide further support to employers in the tourism and hospitality sectors to help them find workers, by temporarily allowing student visa holders to work more than 40 hours per fortnight, as long as they are employed in the tourism or hospitality sectors.
Revenue Increase: This measure is estimated to result in an unquantifiable increase in government tax receipts over the forward estimates period.
Treasury
- Aligning the excise refund scheme for brewers and distillers with the producer rebate for wine producers
The Government will increase the support available to brewers and distillers by aligning the excise refund scheme for alcohol manufacturers with the wine equalisation tax producer rebate. From 1 July 2021, under the revised scheme, eligible brewers and distillers will be able to receive a full remission (up from 60 per cent) of any excise they pay, up to a cap of $350,000 (increased from $100,000) per financial year.
The changes to the scheme will provide additional support to small distillers and brewers, which have been detrimentally affected by COVID-19, assist the growth of Australia’s craft brewing and distilling industry and reduce inconsistencies in support arrangements for alcohol producers.
Cost: This measure is estimated to decrease receipts by $225.0 million over the forward estimates period.
- Removing the $450 per month threshold for superannuation guarantee eligibility
The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer. The measure will have effect from the start of the first financial year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.
This measure will improve equity in the superannuation system by expanding the superannuation guarantee coverage for cohorts with lower incomes. The Retirement Income Review estimated that around 300,000 individuals would receive additional superannuation guarantee payments each month, 63 per cent of whom are women.
Cost: $31.5 million over the forward estimates period.
- Temporary Full Expensing Extension
The Government will extend Temporary Full Expensing for 12 months until 30 June 2023 to further support business investment and the creation of more jobs.
Temporary full expensing will be extended to allow eligible businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.
The 12-month extension will provide eligible businesses with additional time to access the incentive. From 1 July 2023, normal depreciation arrangements will apply.
Cost: $17.9 billion over the forward estimates period and $3.4 billion over the medium term.
- Temporary Loss Carry-Back Extension
The Government will extend temporary loss carry-back to support cash flow. The extension will allow eligible companies to carry back (utilise) tax losses from the 2022-23 income year to offset previously taxed profits as far back as the 2018-19 income year when they lodge their 2022-23 tax return.
Companies with aggregated turnover of less than $5 billion are eligible for temporary loss carry-back. The tax refund is limited by requiring that the amount carried back is not more than the earlier taxed profits and that the carry-back does not generate a franking account deficit. Companies that do not elect to carry back losses under this measure can still carry losses forward as normal.
Cost: $2.8 billion over the forward estimates period, with a net cost of $1.9 billion over the medium term.
EXPENSE MEASURES
Cross Portfolio
- COVID-19 Response Package – Aviation and Tourism Support – Continued
The Government will provide $1.8 billion over four years from 2020-21 to continue to support the aviation and tourism sectors as part of the Government's response to the COVID-19 pandemic, support transition to recovery.
While the government believes this will stimulate tourism, the funding is principally for the aviation sector and there is no direct funding for the accommodation or licensed hospitality sectors.
Cost: $1.8 billion over the forward estimates.
Education, Skills and Employment
- Addressing Workforce Shortages in Key Areas — JobTrainer Fund — extension
The Government will provide $506.3 million over two years from 2021-22 to extend the JobTrainer Fund. This includes an additional $500.0 million in funding for the National Partnership Agreement on the JobTrainer Fund, to be matched by contributions from the states and territories, to deliver around 163,000 additional low fee and free training places in areas of skills need. Eligibility for the Fund will be expanded to include selected employed cohorts that are continuing to be affected by COVID-19. This measure also includes $6.3 million for a campaign to encourage take-up of training opportunities.
Cost: $506.3 million over 2021-22 and 2022-23.
- Building Skills for the Future — Boosting Apprenticeship Commencements wage subsidy — expansion
The Government will provide an additional $2.7 billion over four years from 2020-21 to expand the Boosting Apprenticeship Commencements wage subsidy to further support businesses and Group Training Organisations to take on new apprentices and trainees. This measure will uncap the number of eligible places and increase the duration of the 50 per cent wage subsidy to 12 months from the date an apprentice or trainee commences with their employer.
From 5 October 2020 to 31 March 2022, businesses of any size can claim the Boosting Apprenticeship Commencements wage subsidy for new apprentices or trainees who commence during this period. Eligible businesses will be reimbursed up to 50 per cent of an apprentice or trainee's wages of up to $7,000 per quarter for 12 months.
Cost: $2.7 billion over the forward estimates.
Attorney General’s
- Registered Organisations Commission – enhanced capability
The Government will provide $8.0 million over four years from 2021-22 (and $2.0 million per year ongoing) to the Registered Organisations Commission to enhance its capacity to ensure compliance with the provisions of the Fair Work (Registered Organisations) Act 2009.
Cost: $8 million over the forward estimates.
