TRIPLE SHOT
Treasurer serves workers, small business and jobs market the other jabs in the arm we need
FEDERAL Treasurer Josh Frydenberg’s COVID-19 recovery Budget serves up a triple shot of stimulus aimed at invigorating small business and job creation while putting more tax cuts into workers’ back pockets. Gold Coast Central Chamber boss Martin Hall hailed extending asset write-offs for small business saying it had “gone gangbusters” for the city.
Mayor Tom Tate was “underwhelmed” by a lack of significant new tourism industry funding but said with international borders staying closed he understood why spending was curtailed: “I expected it will dramatically increase as we move forward.”
COVID-19 will cast a decadelong shadow over the economy, with the federal budget not set to return to surplus until 2032.
Treasurer Josh Frydenberg brought down his third budget on Tuesday night with a raft of policies designed to help the country spend its way out of the crippling pandemic downturn and set the stage for the next federal election.
Mr Frydenberg framed the budget as a blueprint for recovery, heavily focusing on boosting the labour market and post pandemic growth.
The Treasurer said Australia was “coming back”, however he warned there would be a long road to recovery.
As a result of COVID-19 the budget deficit will surge to $161 billion in 2021-22 before falling to $57 billion in 2024-25.
Based on current expectations, it will return to surplus in 2032, around the time southeast Queensland is expected to host the Olympic Games and 24 years after the last surplus was announced by then-treasurer Wayne Swan in 2008.
Net debt will increase to $617.5 billion or 30 per cent of GDP this year and peak at $980 billion or 40.9 per cent of GDP in June 2025.
The unemployment rate sits at 5.6 per cent.
Mr Frydenberg said Australia had survived the worst of COVID-19 because it had entered the crisis from a position of strength but warned it had come at a “significant and unavoidable cost.”
“We are better placed than nearly any other country to meet the economic challenges that lie ahead,” he said in his budget speech.
“Consumer sentiment is at its highest in 11 years, business conditions reached record highs and more Australians are in work than ever before.
“Australia’s economic engine is roaring back to life.”
As promised for the Gold Coast, more than $126 million has been committed to funding the light rail’s stage 3 Broadbeach to Burleigh connection.
The federal funding, along with state funding expected to be committed next month, will allow construction of the project to begin this year.
But there was little else in funding for the Gold Coast, with the city not mentioned during Mr Frydenberg’s speech.
Instead the focus was on national initiatives to boost the economy post-COVID through tax cuts.
“This pandemic is not over and for as long as the virus persists, so will we,” Mr Frydenberg said.
“So tonight, we go further,
announcing that more than 10 million low- and middle-income earners will benefit from a new and additional tax cut.
“Low- and middle-income earners will receive up to $1080 for individuals or $2160 for couples. More of their money in their pockets to spend across the economy, creating jobs.”
Gold Coast-based Minister Stuart Robert said the budget delivered strongly for the city in the wake of the pandemic.
“Our performance on both the health and economic fronts has been world leading and the Morrison Government’s unprecedented support has seen our nation perform better than almost every developed nation in the world.”
“The Morrison Government has delivered a budget that meets the needs of Australians and sets out a path forward to secure Australia’s comeback post-COVID.”
But Gold Coast-based Senator Murray Watt said the budget which had abandoned both tourism and the Glitter Strip.
This is a sugar rush budget designed to win an election and a political fix to paper over eight years of neglect,” he said.
“All it does is fix political problems of the government’s own making in childcare, aged care and support for women.
“This budget takes Queenslanders for granted – we get the lowest infrastructure spend per person in the country and we will get half of the new infrastructure funding that NSW, Victoria and South Australia get despite being the most decentralised state.
“Tonight there was nothing new for one of Australia’s fastest growing cities. while he tourism industry has been abandoned with nothing new announced to help it get back on its feet.”
Key points of the budget include:
* $291 billion or 14.7 per cent of GDP in direct economic support for individuals, households and businesses impacted by COVID-19;
* $20.7 billion in tax relief for businesses over the forward estimates by extending current schemes. Includes a program that lets businesses write off the entire cost of new machinery and equipment until June 30, 2023;
*$17.7 billion to reform the aged care system;
* $1.9 billion in extra funding for the rollout of coronavirus vaccines this financial year
Mr Frydenberg said Australia was “well on the road to recovery”.
This pandemic is far from over but our economy is forecast to grow by 1.25 per cent in 2020-21, rising to 4.25 per cent in 2021-22,” he said.
“Employment is at a record high, with 75,000 more Australians in jobs than before the pandemic.
“This budget will help to create more than 250,000 more jobs by the end of 2022-23.”
Mayor Tom Tate welcomed the budget’s support for small business.
“Though there are no significant new announcements for the Gold Coast, there are things to be excited for including the extension of the first home loan scheme,” he said.
“We do have people here who need a hand up and I view this as a compassionate budget for all Australians.”
With Brianna Morris-Grant