Roughly seven months after COVID-19 plunged the world into a pandemic and eventual recession, Josh Frydenberg has unveiled a budget that pushes Australia’s debt ceiling to $1.1 trillion, forecasts debt peaking at $213.7 billion (11.0% of GDP) this financial year, and pledges billions for tax cuts, infrastructure, manufacturing, wage subsidies, and other stimulus elements.

The economic assumptions underlying the Budget predict:

1. COVID-19 vaccine will be rolled out to Australians by the end of next year.

2. Assumes no more widespread outbreaks of COVID-19 — and the associated lockdowns — as has been the case in Victoria.

3.Economic assumptions rely on all state borders being open by Christmas, with the exception of WA.

Below are just some highlights:

More payments coming for pensioners

As part of further support for people not in work, the Government will offer two more tax-free payments of $250 to pensioners and others on government support.

The full list includes people on the:

  • Age Pension
  • Disability Support Pension
  • Carer Payment
  • Family Tax Benefit, including Double Orphan Pension (not in receipt of a primary income support payment)
  • Carer Allowance (not in receipt of a primary income support payment)
  • Pensioner Concession Card holders (not in receipt of a primary income support payment)
  • Commonwealth Seniors Health Card holders
  • Eligible Veterans’ Affairs payment recipients and concession card holders

The payments will roll out in November, followed by a second instalment early next year.

  • Accelerated tax cutsStage two of the already-legislated Personal Income Tax Plan will be brought forward to July 1, 2020, along with a one-off additional benefit from the low- and middle-income tax offset.
    • Lower- and middle-income earners will get a one-off payment of up to $2745 payment for singles or $5490 for dual income families
  • A “JobMaker” package that includes billions in previously-flagged infrastructure, manufacturing, apprenticeship and changes to university funding, which, now that Centre Alliance is on board, will more than double the cost of humanities degrees from next year.
  • Immediate JobMaker hiring credits will be payable for 12 months to employers who hire people aged between 16 and 35 who have been on JobSeeker, Youth Allowance or the Parenting Payment for at least one of the past three months. Big banks will not be eligible for the credit, employees must be employed for a minimum of 20 hours a week, and the credit will be paid at the rate of $200 per week for those aged under 30, and $100 per week for those aged between 30 and 35.
  • “Your Future, Your Super“‘ reforms that are designed to save $17.9 billion over 10 years by: no longer automatically creating new super accounts every time someone changes jobs; creating new reporting obligations for poor performing funds; and creating a new tracking app “YourSuper”.
  • Consumer credit reforms will reduce the time and cost of credit assessments for consumers and businesses, while reducing the obligation on lenders to validate information provided by borrowers — a regulatory shift you might remember as the cause of the last global financial crisis.