BUDGET 2021
Australia’s recovery from COVID-19 is well underway. This Budget is the next stage of the Government’s economic plan to secure Australia’s recovery. It creates jobs, guarantees essential services and builds a more resilient and secure Australia.
It does this with:
- Personal income tax cuts;
- Business tax incentives;
- New apprenticeships and training places;
- More infrastructure; and
- Record funding for schools, hospitals, aged care, mental health and the NDIS.
This will secure Australia’s recovery and drive the unemployment rate down.
The 2021 Budget speech for the 2021-22 financial year was delivered on Tuesday, 11 May 2021.
Key Budget tax announcements include:
- The Low & Middle Income Tax Offset (LMITO) will be extended to 2021–22. No further, or other tax scale rate changes were announced.
- Medicare Levy low income thresholds annual CPI adjustment (the usual annual adjustment).
- the law will be changed to introduce greater clarity to tax residency rules for individuals, by relying primarily on a “bright line” test of 183 days or more physical presence as the basis of tax residency. Secondary criteria will be measurable and objective. Timing: To have effect from the first income year after the date of Royal Assent of the enabling legislation.
- the requirement to exclude the first $250 of deductions in the calculation of self-education expenses is to be removed. Timing: With effect from the first income year after the date of Royal Assent of the enabling legislation.
- Child Care Subsidy cap of $10,560 to be removed
- Super Guarantee minimum monthly income threshold of $450 is to be removed. Timing: Enabling legislation is expected to take effect from 1 July 2022.
- The Work Test for non-concessional or salary sacrifice super contributions currently required of older persons (aged 67 to 74) to be removed, subject to legislation expected to take effect from 1 July 2022. Personal deductible contributions will continue to be subject to the work test.
- Super downsizer (sale of principal residence) contributions age threshold is to be reduced to 60 years (from 65) – with effect from 1 July 2022
- Business instant asset temporary full expensing to be extended for a further year until 30 June 2023
- Companies loss carry-back availability to be extended for a further year until 30 June 2023
- Effective Life of patents, registered designs, copyright & in-house software can be self-assessed from 1 July 2023 (currently a statutory effective life)
- Cessation of employment to be removed as a taxing point for employee share scheme interests. Timing: To apply to ESS interests issued from the first income year after the date of Royal Assent of the enabling legislation.
- To encourage investment in the sectors, income from medical and biotech patents to be taxed at a concessional corporate rate of 17%. Timing: From 1 July 2022. The government will consult on whether to extend the scheme to the clean energy sector. See:
- Unboxing the Australian Government’s $100m patent scheme – King & Wood Mallesons
- Patent Box discussion paper – Treasury
- Australian digital games developers: From 1 July 2022, the Digital Games Tax Offset will provide eligible developers with a 30% refundable tax offset for qualifying Australian games expenditure.
- Relaxation of residency rules for SMSFs to enable members to continue to contribute to their superannuation fund whilst temporarily overseas. The measure is designed to achieve parity with APRA-regulated funds. Timing: From the start of the first financial year after Royal Assent of the enabling legislation, which is expected before 1 July 2022.
- First Home Super Saver Scheme: The maximum voluntary super contributions which can be released will be increased to $50,000 and is expected to take effect from 1 July 2022.
- Proposed measures: Australia’s Digital Economy, Investment Incentives – a digital games tax offset, self-assessment of intangible assets effective life, and a review of venture capital tax concessions.
Increased Low and Middle Income Tax Offset (LMITO)
For the years from 2018-19 through to 2021-22 the LMITO base amount will increase from $200 to $255; the maximum amount will increase from $530 to $1080
The LMITO will be available subject to revised taxable income tests as follows:
| Income | Offset |
| up to $37,000 | $255 |
| $37,001 to $48,000 | $255 plus 7.5 cents for each dollar over $37,000 |
| $48,001 to $90,000 | $1,080 |
| $90,001 to $126,000 | $1,080 less 3 cents for each dollar over $90,000 |
As before, the LMITO will be paid in arrears by inclusion in the tax assessment after tax return lodgement.
Change in tax scales
- From 1 July 2022 the ceiling of the 19% bracket will be increased from $41,000 to $45,000
- From 1 July 2024, the 32.5% marginal tax rate will be reduced to 30%.
Increase in the new Low Income Tax Offset
- Under existing legislation the new LITO of $645 replaces both LITO and LMITO from 1 July 2022
- Under the Budget 2019 proposals from 1 July 2022 the LITO will be increased from $645 to $700 with a withdrawal rate of 5% between taxable incomes of $37,500 and $45,000, (instead of at 6.5% between taxable incomes of $37,000 and $41,000 as previously legislated). LITO will then be withdrawn at a rate of 1.5% between taxable incomes of $45,000 and $66,667.
Securing Australia’s recovery
Australia’s recovery from COVID-19 is well underway
More people are in work than ever before and unemployment is on course to settle below 5 per cent for just the second time in almost 50 years
Our comeback
In the face of COVID‑19, Australia achieved world-leading health outcomes, with fewer infections, hospitalisations and deaths than most other countries.
The Government’s emergency support provided a crucial lifeline to the economy during Australia’s first recession in almost 30 years.
The economy has recovered strongly and is set to return to pre-pandemic levels nine months earlier than expected last Budget with the unemployment rate’s recovery set to be five times faster than the 1990s recession.
While we are not yet out of the pandemic, we are better placed than most other countries in the world to meet the economic challenges that lie ahead.
This Budget builds on this success to secure Australia’s recovery.
Creating jobs and rebuilding our economy
- An additional $7.8 billion in tax cuts for low- and middle-income earners, worth up to $1,080 for individuals or $2,160 for dual income couples
- Extending temporary full expensing and temporary loss carry-back to provide an additional $20.7 billion in tax relief over the forward estimates to support business investment and create jobs
- An additional $15.2 billion over ten years to fund infrastructure commitments
- Extending the HomeBuilder construction commencement period and the New Home Guarantee
- Investing in the settings and skills to grow Australia’s digital economy
- Supporting our worst hit sectors and regions, including $1.2 billion for aviation and tourism support
Guaranteeing the essential services
- Protecting Australians’ health by extending the COVID-19 health response and further investing in the COVID-19 vaccination program
- Supporting people with disability by fully funding the NDIS with an additional $13.2 billion
- Providing $17.7 billion to fund aged care reforms and ensure older Australians are treated with respect, care and dignity
- $2.3 billion for improved and expanded mental health care and suicide prevention
- Investing in our preschools
Improving women’s safety and economic security
- Addressing violence against women and children
- Ensuring Australian workplaces are free from sexual harassment
- Improving the accessibility and quality of women’s health services
- Strengthening women’s economic security by improving the affordability of child care and supporting employment and women’s financial security
Building a more resilient and secure Australia
- Keeping Australians safe by investing in our national security and law enforcement capabilities
- Helping the agriculture industry achieve its goal of increasing farm gate output to $100 billion by 2030
- Keeping energy secure, affordable and reliable;
- Driving medical and biotech innovation
- Unlocking the potential of our regions
- Supporting communities affected by natural disasters
Economic and fiscal outlook
A pathway to a stronger economy and a stronger budget position
Australia entered the COVID‑19 pandemic from a position of economic and fiscal strength. The Budget was in balance for the first time in 11 years with workforce participation at a record high and welfare dependency at its lowest in a generation.
A strong fiscal position allowed the Government to respond decisively to the once-in-a-century pandemic with $291 billion in economic support. The speed of our economic recovery has exceeded the most optimistic of our expectations and Australia has outperformed every major advanced economy.
The Government’s Economic and Fiscal Strategy will secure the economic recovery by supporting strong and sustainable private sector led growth and job creation to drive the unemployment rate down to pre-crisis levels or lower.
A strong economy with low unemployment will position the Government to deliver on its medium term strategy of stabilising and then reducing debt as a share of GDP over time. On the back of a stronger recovery to date, net debt as a share of the economy will peak at a lower level compared to what was expected in the 2020‑21 Budget, falling to 37.0 per cent of GDP by 30 June 2032.
Once Australia secures the recovery and unemployment is back to its pre-crisis levels or lower, our fiscal strategy will shift to the second phase and be focused on its medium term objective of stabilising and reducing debt.
Source: ABS Labour Force Survey, Treasury forecasts.
Global economic outlook
The global recovery is underway but remains highly uncertain
COVID‑19 resulted in the largest contraction in global economic activity since the Great Depression. Global GDP fell by 3.3 per cent in 2020, as economies sought to limit the spread of the virus and uncertainty rose.
Australia’s health and economic outcomes compare favourably to international peers. Our economy outperformed all major advanced economies in 2020 and our labour market continues to recover quickly. Compared to major advanced economies, Australia is the first economy to have seen hours worked and employment recover to pre-pandemic levels.
The outlook for the global economy has strengthened and global GDP is forecast to grow by 6 per cent in 2021, building on the recovery that began across the latter part of last year.
Significant economic support from governments, along with positive progress on vaccine rollouts in economies facing high rates of virus transmission or strict containment measures, have bolstered the outlook.
There are positive signs for Australia’s external outlook. Australia’s major trading partners are forecast to grow by 6½ per cent in 2021, more quickly than the global economy.
While the outlook is more positive, we are still in the midst of a once‑in‑a‑century pandemic. The virus remains a significant threat as recent events in India attest. The global economic recovery is fragile and expected to be uneven across different economies highlighted by a double‑dip recession in the euro area.
Note: ^ Data are seasonally adjusted.
Source: National statistical agencies.
Domestic economic outlook
The Australian economy is recovering faster and stronger from the impact of the COVID‑19 pandemic
The Australian economy has shown remarkable resilience in the face of the COVID‑19 pandemic with the economy rebounding at its fastest pace on record over the second half of 2020. The economy is now expected to have exceeded its pre-pandemic level of activity in early 2021, nine months earlier than expected in the 2020‑21 Budget.
Almost one million jobs have been added to the economy since the worst of the downturn. There are now more Australians employed than ever before. The unemployment rate has fallen rapidly and is set to recover five times faster than the last recession in the 1990s, reducing the potential for longer‑term scarring in the labour market and supporting growth in the medium term.
The Government’s significant fiscal response to the crisis and world leading health outcomes have laid the foundations for a strong economic recovery, with consumer sentiment at its highest level in 11 years and business conditions reaching a record high.
Fiscal support remains in place to boost private sector‑led growth and job creation.
The unemployment rate is expected to fall to 5 per cent in mid‑2022 before falling further to 4¾ per cent in mid‑2023. The unemployment rate in Australia has only been sustained below 5 per cent once since the early 1970s and in this Budget, we are on a trajectory to do so again.
Source: ABS Australian National Accounts: National Income, Expenditure and Product and Treasury.
Budget at a glance
Rebuilding our economy to repair the budget following COVID‑19
Over the next four years, the deficit will nearly halve as a stronger economy improves the bottom line. The underlying cash deficit in 2021‑22 is forecast to be $106.6 billion (5.0 per cent of GDP). This is expected to improve over the forward estimates to a $57.0 billion deficit (2.4 per cent of GDP) in 2024‑25 and to a deficit of 1.3 per cent of GDP by the end of the medium term.
Compared to the 2020‑21 Budget, the underlying cash deficit has improved by $52.7 billion in 2020‑21.
Gross debt is expected to be 40.2 per cent of GDP at 30 June 2021, increasing to 50.0 per cent of GDP by the end of the forward estimates. Gross debt is projected to stabilise at around 51 per cent of GDP over the medium term.
Net debt will increase to 30.0 per cent of GDP at 30 June 2021 before peaking at 40.9 per cent of GDP at 30 June 2025, and declining to 37.0 per cent of GDP at the end of the medium term.
Net debt is lower in every year compared to last year’s Budget when it was expected to peak at 43.8 per cent of GDP.
| Actual | Estimates | ||||||
|---|---|---|---|---|---|---|---|
| 2019‑20 $b |
2020‑21 $b |
2021‑22 $b |
2022‑23 $b |
2023‑24 $b |
2024‑25 $b |
Total(a) $b |
|
| Underlying cash balance ($b)(c) | -85.3 | -161.0 | -106.6 | -99.3 | -79.5 | -57.0 | -342.4 |
| Per cent of GDP | -4.3 | -7.8 | -5.0 | -4.6 | -3.5 | -2.4 | |
| Gross debt(d) | 684.3 | 829.0 | 963.0 | 1,058.0 | 1,134.0 | 1,199.0 | |
| Per cent of GDP | 34.5 | 40.2 | 45.1 | 48.6 | 49.7 | 50.0 | |
| Net debt | 491.2 | 617.5 | 729.0 | 835.0 | 920.4 | 980.6 | |
| Per cent of GDP | 24.7 | 30.0 | 34.2 | 38.4 | 40.4 | 40.9 | |
| Outcomes | Forecasts | |||||
|---|---|---|---|---|---|---|
| 2019‑20 | 2020‑21 | 2021‑22 | 2022‑23 | 2023‑24 | 2024‑25 | |
| Real GDP | -0.2 | 1 1/4 | 4 1/4 | 2 1/2 | 2 1/4 | 2 1/2 |
| Employment | -4.2 | 6 1/2 | 1 | 1 | 1 1/4 | 1 1/4 |
| Unemployment rate | 6.9 | 5 1/2 | 5 | 4 3/4 | 4 1/2 | 4 1/2 |
| Consumer price index | -0.3 | 3 1/2 | 1 3/4 | 2 1/4 | 2 1/2 | 2 1/2 |
| Wage price index | 1.8 | 1 1/4 | 1 1/2 | 2 1/4 | 2 1/2 | 2 3/4 |
| Nominal GDP | 1.7 | 3 3/4 | 3 1/2 | 2 | 4 3/4 | 5 |
(a) Real GDP and Nominal GDP are percentage change on preceding year. The consumer price index, employment, and the wage price index are through‑the‑year growth to the June quarter. The unemployment rate is the rate for the June quarter.
(b) Total is equal to the sum of amounts from 2021‑22 to 2024‑25
(c) Excludes net Future Fund earnings before 2020‑21.
(d) Gross debt measures the face value of Australian Government Securities (AGS) on issue.
Source: ABS Australian National Accounts: National Income, Expenditure and Product; Labour Force, Australia; Wage Price Index, Australia; Consumer Price Index, Australia and Treasury.
Protecting Australians from COVID-19
Providing ongoing support for the health system and delivering a comprehensive vaccination program
The Government continues to put the health of Australians first
The Government is providing $1.5 billion in this Budget to extend a range of health responses, to keep Australians protected alongside the roll-out of COVID-19 vaccines. This includes continued funding for telehealth services, which has seen over 56 million services delivered to 13.7 million patients since March 2020, COVID-19 testing and support to prevent outbreaks in remote communities.
Over 2.5 million vaccine doses have already been administered.
In this Budget, the Government is investing a further $1.9 billion in the COVID-19 vaccination roll-out. This is to protect Australians from COVID-19 and facilitate Australia’s social and economic recovery.
Funding for the roll-out of COVID-19 vaccines includes administering vaccines, managing distribution and logistics, recording and monitoring data, communications and supporting the states and territories.
In this Budget, the Government has committed to purchasing additional vaccine doses. This expands our vaccine portfolio to around 170 million doses.
Lower taxes for hard-working Australians, and business tax relief to create jobs
Tax cuts for low- and middle-income earners
To support household income and create more jobs, the Government is delivering an additional $7.8 billion in tax cuts by retaining the low and middle income tax offset (LMITO) in 2021-22.
Incentives for businesses to invest and create jobs
The Government is extending temporary full expensing for an additional year until 30 June 2023. Temporary loss carry-back is also being extended to include the 2022-23 income year. The extension of these measures will deliver an additional $20.7 billion in tax relief to businesses over the forward estimates period.
Building on prior tax reform for small to medium businesses
Last Budget, the Government provided $105 million in tax relief for around 20,000 small to medium businesses to access ten small business tax concessions.
The Government will deliver more than $16 billion in tax cuts to small and medium businesses by 2023-24 with around $1.5 billion flowing in 2019-20.
This includes reducing the tax rate for small and medium companies, from 30 per cent in 2014-15 to 25 per cent from 1 July 2021.
Making it easier for small business to pause debt recovery action while in dispute
To make it simpler, faster and cheaper for small business to pause or modify Australian Taxation Office debt recovery actions, the Government is broadening the Administrative Appeal Tribunal’s (AAT) powers to pause or modify such actions until the underlying dispute is resolved.
This will provide an avenue for small businesses to ensure they are not required to start paying a disputed debt until the matter has been determined by the AAT.
Supporting construction jobs and home ownership
HomeBuilder
HomeBuilder has been a highly successful program, supporting construction activity and jobs. Over 120,000 Australians have applied for the HomeBuilder grant, which is expected to support over $30 billion in residential construction activity.
The Government extended the six month construction commencement period to 18 months for all existing applicants, which will smooth out the HomeBuilder construction activity in 2021 and into 2022.
New Home Guarantee
Recognising the importance of the residential construction sector in driving jobs and economic growth, the Government is providing a further 10,000 places under the New Home Guarantee in 2021-22, specifically for first home buyers seeking to build a new home or purchase a newly built home with a deposit of as little as five per cent.
Family Home Guarantee
The Government is providing a pathway to home ownership to support single parents with dependants, regardless of whether they are a first home buyer or a previous owner-occupier. From 1 July 2021, 10,000 guarantees will be made available over four years to eligible single parents with dependants to build a new home or purchase an existing home with a deposit of as little as two per cent, subject to an individual’s ability to service a loan.
First Home Super Saver Scheme
The Government is helping first home buyers achieve their dream of home ownership sooner under the First Home Super Saver Scheme. From 1 July 2022, the Government will increase the maximum amount of voluntary contributions that can be released under the First Home Super Saver Scheme from $30,000 to $50,000.
Infrastructure investment
The Government is supporting jobs now and into the future with a record $110 billion 10-year infrastructure investment pipeline
The Government is building on its 10‑year infrastructure pipeline by committing an additional $15.2 billion to infrastructure projects over the next ten years which will support over 30,000 jobs over the lives of those projects. This builds on the 100,000 jobs already being supported by projects currently under construction through the existing pipeline.
Building Australia
Queensland
$1.6 billion for projects, including:
- $400 million for the Bruce Highway; and
- $240 million for the Cairns Western Arterial Road Duplication.
Additionally, $464.4 million is also being allocated to road safety and community infrastructure projects.
Northern Territory
$323.9 million for projects, including:
- $173.6 million for the Northern Territory Gas Industry Roads Upgrades; and
- $150 million for the Northern Territory National Network Highway Upgrades.
Additionally, $77.1 million is also being allocated to road safety and community infrastructure projects.
Western Australia
$1.3 billion for projects, including:
- $237.5 million for METRONET works at Hamilton Street and Wharf Street; and
- $200 million for upgrades to the Great Eastern Highway.
Additionally, $288.1 million is also being allocated to road safety and community infrastructure projects.
New South Wales
$3.3 billion for projects, including:
- $2 billion for upgrades to the Great Western Highway between Katoomba and Lithgow; and
- $500 million for Princes Highway Corridor upgrades.
Additionally, $548.5 million is also being allocated to road safety and community infrastructure projects.
Australian Capital Territory
$167.3 million for projects, including:
- $132.5 million for Canberra Light Rail – Stage 2A; and
- $26.5 million for the William Hovell Drive Duplication.
Additionally, $18.9 million is also being allocated to road safety and community infrastructure projects.
South Australia
$3.2 billion for projects, including:
- $2.6 billion for the North-South Corridor – Darlington to Anzac Highway; and
- $148 million for Stage 2 of the Augusta Highway Duplication.
Additionally, $173.9 million is also being allocated to road safety and community infrastructure projects.
Victoria
$3 billion for projects, including:
- $2 billion for the Melbourne Intermodal Terminal;
- $380 million for the Pakenham Roads Upgrade; and
- $250 million for Monash Roads Upgrades.
Additionally, $373.5 million is also being allocated to road safety and community infrastructure projects.
Tasmania
$322.6 million for projects, including:
- $113.4 million for Midland Highway Upgrades; and
- $80 million for the Bass Highway Safety and Freight Efficiency Upgrades Package.
Additionally, $54.6 million is also being allocated to road safety and community infrastructure projects.
Digital Economy Strategy
Laying the foundations for Australia to be a leading digital economy and society by 2030
Digital Economy Strategy
The COVID-19 pandemic has seen Australians and Australian businesses embrace digital technologies more rapidly than ever before. To build on this momentum, and previous investments, the Government is investing $1.2 billion in Australia’s future through the Digital Economy Strategy to:
- Build digital skills and capabilities;
- Encourage business investment; and
- Transform government services.
Unlocking business growth
Opening opportunities for business to create even more jobs
Global Business and Talent Attraction Taskforce
By attracting global talent and encouraging global businesses to invest in and relocate to Australia, the Government is ensuring Australia can capitalise on our strong economic position coming out of the COVID-19 pandemic.
Deregulation package
This Budget’s $134.6 million deregulation package will support Australia’s economic recovery by cutting red tape for businesses interacting with government.
This package will deliver an estimated $430 million annually in reduced compliance costs for businesses, individuals, and not-for-profits.
Comprehensive aged care reforms
In response to the Royal Commission into Aged Care Quality and Safety, the Government is investing $17.7 billion over five years to ensure older Australians are treated with respect, care and dignity
$7.8 billion to reform residential care to support a better and more sustainable system
$6.5 billion for immediate investments for care in the home
Improving access to high-quality and safe aged care
Growing a bigger, highly skilled, caring workforce
Simplifying navigation and better access to quality aged care
Guaranteeing health and disability essentials
Guaranteeing Medicare and the National Disability Insurance Scheme
The Government is providing record funding to support Australians with disability and to guarantee access to essential healthcare and medicines.
Supporting people with disability
The Government has committed an additional $13.2 billion over four years to 2023-24 to ensure the NDIS continues to provide support to people with significant and permanent disability.
Guaranteeing Medicare
To ensure Medicare services remain best practice, the Government is providing $220 million over four years to update and add new health services to the Medicare Benefits Schedule.
Ensuring access to affordable medicines
The Government is providing $878.7 million to support access to affordable medicines through the Pharmaceutical Benefits Scheme (PBS).
Investing in mental health
The Government is delivering preventative, compassionate and effective care for Australians.
Having endured drought, bushfires, floods and the COVID-19 pandemic, Australians have been reminded that we need to take care of the mental health and wellbeing of ourselves and our loved ones.
Investing in our preschools
$2 billion over four years for early childhood education
A quality early education program has a clear, positive impact on children and families. Preschool learning leads to better education outcomes later in life and helps children succeed across key development domains upon arrival at school.
Strengthening education
Boosting investment in schools and higher education
The Government is investing record funding in Australian schools to ensure all students are equipped with the necessary skills for future study or work.
Record funding for Australian schools
The Government is investing record funding in Australian schools to ensure all students are equipped with the necessary skills for future study or work.
The Government’s recurrent annual funding for schools has increased from $13.8 billion in 2014 to $23.4 billion in 2021, with a commitment of $289 billion in total recurrent funding over the next ten years.
Providing additional courses for domestic students
To ensure there are opportunities for Australian students to build skills for the workforce, the Government is providing an additional 5,000 Commonwealth supported short course places at non-university higher education providers in 2021.
These places are in addition to the 2,500 national priority short courses provided as part of the 2020-21 Budget.
Women’s safety
Reducing violence against women and children
Everyone has the right to be safe at home, at work and online. The Government is delivering measures that address the high rates of violence against women and children.
This funding will provide immediate support for victims of domestic violence. Our plan will help victims who escape dangerous situations. It will also assist women to access appropriate and timely specialist services, including effective legal support.
This Budget builds on the Government’s earlier commitments, including the National Plan to Reduce Violence against Women and their Children 2010-22 and the COVID-19 Family and Domestic Violence package.
Supporting victims of violence
The $1.1 billion package of initiatives includes:
- Financial support for women and their children who leave a violent relationship; and
- Additional emergency accommodation for women and children experiencing family and domestic violence.
Assistance to navigate the legal system
The Government is also committed to providing legal support for women to access justice and navigate the legal system.
This includes:
- $129 million in increased funding for legal assistance services, to ensure that women can access the justice system;
- $101.4 million to increase access to Children’s Contact Services, to ensure that separated parents are able to safely manage the contact and changeover of their children;
- $85 million to expand family law frontline services to ensure that each family law court with a permanent judge has access to Family Advocacy and Support Services; and
- $60.8 million to directly fund reform of the family law courts, to significantly shorten the time separating families spend in litigation.
Safe at work
The Government is implementing the Respect@Work Report response, working with the states and territories and employers to prevent and address sexual harassment in the workplace.
The Government is committed to building a culture of respect in Australia, including creating safe and supportive working environments. The Government will provide $20.5 million for the implementation of the response to the Respect@Work Report.
This includes funding of $5.3 million for initiatives such as primary prevention programs and research into sexual harassment.
In addition, this Budget will provide funding for frontline support to address sexual harassment in the workplace.
The Government is providing $6 million to enhance the Workplace Gender Equality Agency to better prevent and respond to workplace sexual harassment.
Safe online
The Government is providing $26.2 million to improve the safety of online spaces for women and children. This includes:
- a new program supporting children experiencing technology-facilitated abuse;
- funding to bolster the eSafety investigations team;
- a pilot program to develop cutting edge software to investigate intimate images shared without consent; and
- a new National Online Safety Awareness Campaign.
Women’s economic security
Supporting the economic security of women
Affordable child care
The Government is investing an additional $1.7 billion in child care, to increase the subsidy for the second and subsequent child. The annual cap will also be removed from 1 July 2022. Reducing disincentives to work will add up to 300,000 hours of work per week to the Australian economy, the equivalent of around 40,000 individuals working an extra day per week. This change is expected to boost the level of GDP by up to $1.5 billion per year, with 250,000 Australian families expected to benefit.
This builds on the Government’s existing funding for women to participate in the workforce, including $9.7 billion in annual child care support, $2.3 billion in annual paid parental leave and a further $359.4 million through the 2018 and 2020 Women’s Economic Security Statements.
Security in retirement
The Government is committed to improving retirement incomes for women. The removal of the $450 per month superannuation threshold will expand the superannuation guarantee, improving coverage and increasing retirement savings, particularly for women.
Housing
The Government is providing a pathway to home ownership by establishing the Family Home Guarantee to support single parents with dependants (who are predominantly women) to enter or re-enter the housing market.
Women in leadership
Having women in visible positions of leadership is central to cultural change, ensuring respect for women in the workplace and providing role models for women in their chosen careers.
Building on the 2020 Women’s Economic Security Statement, the Government is providing $38.3 million to expand the successful Women’s Leadership and Development Program.
Funding will help improve outcomes for women in areas such as job creation, economic security, safety and international engagement.
This funding will enable successful Women@Work projects to continue. This will help ensure girls and women, including those from diverse backgrounds, are able to pursue the careers of their choice.
Quality career outcomes
The Government is supporting women to reach their potential in the workforce. It is investing $43.6 million to enable women to pursue STEM qualifications and is expanding the National Careers Institute Partnership Grants program to provide more career opportunities for women.
Encouraging participation in sport
The Government is providing $17 million to inspire girls to play sport taking advantage of Australia hosting the FIBA Women’s Basketball World Cup in 2022 and the FIFA Women’s Soccer World Cup in 2023. Funding is also assisting women to become accredited as coaches or officials and encouraging more Indigenous women to participate in sport.
Women’s health and wellbeing
Investing in the health and wellbeing of Australian women
Women’s health
The Government is committed to ensuring Australian women can access the services they need at every stage of life for their health and wellbeing.
The Government is providing $16.6 million for ongoing programs that cover maternal, sexual and reproductive health, and $5 million for pelvic pain and endometriosis support.
$13.7 million is being provided to the Women and Infants Research Foundation, to expand nationally across Australia from a successful Western Australian trial. The program aims to reduce the rate of pre-term birth, which is currently over eight per cent.
The Government is supporting Medicare funded genetic testing for pregnant women at risk of having a child with a serious genetic disorder, as well as treatment for women with breast defects from breast surgery, breast cancer or congenital breast deformity.
Gynaecology services funded by Medicare will be reformed to ensure women receive best practice healthcare, and face lower out-of-pocket costs.
Women will have more affordable access to essential and lifesaving medicines through the Pharmaceutical Benefits Scheme (PBS). From 1 April 2021, the Government has funded amended PBS listings for women with certain types of breast cancer. Without the PBS subsidy, patients might pay around $50,000 per course of treatment. Instead, women will now pay $41.30 per script or $6.60 with a concession card.
These measures are part of the Government’s record funding for health, with total spending to increase from $98.3 billion in 2021-22 to $103.2 billion in 2024-25.
Cultural and linguistic diversity
The Government will provide $10.3 million to extend the Temporary Visa holders payment pilot for women experiencing family and domestic violence. The Government is also investing $29.3 million in migrant and refugee women’s safety, social inclusion and economic participation.
In addition, the Government will provide $6.8 million for better family, domestic and local level prevention initiatives for diverse communities.
Funding for Indigenous women and their families
The Government will invest $57.6 million to better support Indigenous women and children who have experienced or are experiencing family violence. Funding will improve the capability of service providers, facilitate co-designed, place based initiatives to reduce family violence and implement a new dedicated Indigenous survey.
The Government is also providing $63.5 million for 2,700 places at Indigenous girls academies, helping Indigenous girls to complete year 12 and realise their potential. In addition, $13.9 million will fund local approaches to social enterprise-driven solutions for Indigenous women’s economic recovery.
Funding will contribute to the Closing the Gap targets and better outcomes for Indigenous Australians. It will complement measures that will be announced in the Commonwealth’s Implementation Plan.
Women with disability
The Government will invest $9.3 million in preventing and responding to violence against women and girls with disability.
Supporting and empowering Indigenous Australians
Partnering with Aboriginal and Torres Strait Islanders
The Government is providing $243.6 million to support improved economic, social and education outcomes for Indigenous Australians
Improving veteran support
Recognising the sacrifices made by our veterans
Our veterans have made sacrificies for our country and deserve support when they leave service. We are investing an additional $460.4 million to provide veterans easy access to the support they need and further improve veterans’ wellbeing.
Supporting older Australians
Increased flexibility for older Australians and cutting red tape for those who choose to manage their own retirement savings
The Government is supporting older Australians by providing more choices to contribute to superannuation, enabling them to increase their living standards in retirement and reducing red tape.
Keeping Australians safe
The Government is providing more than $1.9 billion over the decade to strengthen our national security and law enforcement capabilities and ensure the security of all Australians
The Australian Government is committed to ensuring the security of all Australians. Strong national security underpins our economic prosperity and social cohesion.
Growing Australia’s agriculture industry to 2030 and beyond
The Government is helping the agriculture industry achieve its goal of increasing farm gate output to $100 billion by 2030
Manufacturing, trade and science
The Government is investing in Australia’s domestic manufacturing sector and future technological capability
By investing in manufacturing, science and research, the Government is supporting new innovative, high paid jobs and addressing supply chain vulnerabilities to make sure we have access to the goods needed for our welfare, prosperity and security.
The Government is delivering on its $1.5 billion Modern Manufacturing Strategy by releasing our National Manufacturing Priority Road Maps, commencing investments through the $1.3 billion Modern Manufacturing Initiative, and working with industry to improve our sovereign capabilities through the $107.2 million Supply Chain Resilience Initiative.
The Government is committed to further developing our sovereign vaccine manufacturing capability, including the local production of mRNA vaccines.
Stronger regions
Regional Australia is the lifeblood of the nation and critical to the economy
- Building better regions: The Government is expanding on its $1 billion Building Better Regions Fund, adding $250 million for a sixth round.
- Our North, Our Future – Next Five Year Plan: The Government is unlocking the potential of northern Australia by committing $189.6 million to its next five year plan.
- Northern Australia insurance affordability and mitigation: The Government is committed to making property insurance more affordable for households and small businesses in cyclone‑prone areas and intends to establish a reinsurance pool for cyclone damage and related flooding, backed by a $10 billion Government guarantee.
Building disaster resilience
Supporting communities affected by natural disasters to mitigate the impact of future severe weather events.
Disaster preparedness
The Government is investing in making Australia more disaster resilient and improving preparedness, response and recovery through:
- Establishing the new National Recovery and Resilience Agency and enhancing Emergency Management Australia; and
- $209.7 million to establish the Australian Climate Service, enhancing the Commonwealth’s extensive climate and natural disaster risk information to build Australia’s climate resilience.
Reducing emissions
Australia is on track to meet and beat our 2030 Paris target.
The Government is investing $1.6 billion in strong and practical action on climate change.
Caring for our environment
The Government is protecting our unique environment for generations to come
Appendix A: Budget aggregates
The table below shows the main cash and accrual budget aggregates for the Australian Government general government sector over the period from 2019‑20 to 2024‑25. The underlying cash deficit is estimated to be $106.6 billion in 2021‑22. The net operating balance deficit is estimated to be $92.7 billion in 2021‑22.
| Actual | Estimates | ||||||
|---|---|---|---|---|---|---|---|
| 2019‑20 $b |
2020‑21 $b |
2021‑22 $b |
2022‑23 $b |
2023‑24 $b |
2024‑25 $b |
Total(a) $b |
|
| Receipts | 469.4 | 499.8 | 482.1 | 494.0 | 532.9 | 572.0 | 2,080.9 |
| Per cent of GDP | 23.6 | 24.3 | 22.6 | 22.7 | 23.4 | 23.9 | |
| Payments(b) | 549.6 | 660.8 | 588.7 | 593.3 | 612.4 | 628.9 | 2,423.2 |
| Per cent of GDP | 27.7 | 32.1 | 27.6 | 27.3 | 26.9 | 26.2 | |
| Net Future Fund earnings(c) | 5.0 | na | na | na | na | na | na |
| Underlying cash balance(d) | -85.3 | -161.0 | -106.6 | -99.3 | -79.5 | -57.0 | -342.4 |
| Per cent of GDP | -4.3 | -7.8 | -5.0 | -4.6 | -3.5 | -2.4 | |
| Revenue | 486.3 | 504.9 | 496.6 | 505.1 | 544.5 | 578.0 | 2,124.2 |
| Per cent of GDP | 24.5 | 24.5 | 23.3 | 23.2 | 23.9 | 24.1 | |
| Expenses | 578.5 | 659.4 | 589.3 | 595.4 | 614.7 | 633.7 | 2,433.1 |
| Per cent of GDP | 29.2 | 32.0 | 27.6 | 27.4 | 27.0 | 26.4 | |
| Net operating balance | -92.3 | -154.5 | -92.7 | -90.2 | -70.2 | -55.7 | -308.9 |
| Per cent of GDP | -4.7 | -7.5 | -4.3 | -4.1 | -3.1 | -2.3 | |
| Net capital investment | 4.0 | 8.6 | 10.3 | 10.9 | 10.1 | 9.2 | 40.6 |
| Fiscal balance | -96.3 | -163.2 | -103.0 | -101.2 | -80.3 | -64.9 | -349.4 |
| Per cent of GDP | -4.9 | -7.9 | -4.8 | -4.6 | -3.5 | -2.7 | |
| Memorandum: | |||||||
| Net Future Fund earnings(c) | 5.0 | 5.5 | 3.0 | 3.2 | 3.4 | 3.6 | 13.2 |
| Headline cash balance | -93.9 | -168.2 | -117.0 | -109.4 | -75.4 | -65.1 | -367.0 |
(a) Total is equal to the sum of amounts from 2021‑22 to 2024‑25.
(b) Equivalent to cash payments for operating activities, purchases of non-financial assets and net cash flows from financing activities for leases.
(c) Under the Future Fund Act 2006, net Future Fund earnings will be available to meet the Australian Government’s superannuation liability from 2020‑21. From this time, the underlying cash balance includes expected net Future Fund earnings.
(d) Excludes net Future Fund earnings before 2020‑21.
Appendix B: Revenue and spending
Total revenue for 2021‑22 is expected to be $496.6 billion. Total expenses are expected to be $589.3 billion.
Appendix C: Major initiatives – receipts
This table summarises the major initiatives in the 2021‑22 Budget and their impact on the underlying cash balance. More comprehensive information is provided in Budget Paper No. 2, Budget Measures 2021‑22.
| Initiatives(a) | 2020‑21 $m |
2021‑22 $m |
2022‑23 $m |
2023‑24 $m |
2024‑25 $m |
Total $m |
|---|---|---|---|---|---|---|
| Temporary full expensing extension(b) | 0.0 | 0.0 | -600.0 | -10,900.0 | -6,400.0 | -17,900.0 |
| Retaining the Low and Middle Income Tax Offset for the 2021‑22 income year | 0.0 | 0.0 | -7,400.0 | -400.0 | .. | -7,800.0 |
| Temporary loss carry back extension(c) | 0.0 | 0.0 | 0.0 | -3,200.0 | 410.0 | -2,790.0 |
| Employee Share Schemes — removing cessation of employment as a taxing point and reducing red tape | 0.0 | 0.0 | 0.0 | -345.0 | -205.0 | -550.0 |
(a) Impact on underlying cash balance. Figures are rounded to the nearest million and totals may not sum due to rounding.
(b) This measure is estimated to decrease receipts by $17.9 billion over the forward estimates period and $3.4 billion over the medium term.
(c) This measure is estimated to decrease receipts by $2.8 billion over the forward estimates period, with a net cost of $1.9 billion over the medium term.
Appendix D: Major initiatives – payments
This table summarises the major payments initiatives in the 2021-22 Budget and their impact on the underlying cash balance. More comprehensive information is provided in Budget Paper No. 2, Budget Measures 2021-22.
| Initiatives(a) | 2020‑21 $m |
2021‑22 $m |
2022‑23 $m |
2023‑24 $m |
2024‑25 $m |
Total $m |
|---|---|---|---|---|---|---|
| Increased support for unemployed Australians(b) | -697.4 | -2,621.7 | -2,092.9 | -2,027.2 | -2,024.9 | -9,464.1 |
| Aged Care — Government response to the Royal Commission into Aged Care Quality and Safety — residential aged care services and sustainability(b) | -263.1 | -879.1 | -1,889.1 | -2,326.0 | -2,435.4 | -7,792.7 |
| Aged Care — Government response to the Royal Commission into Aged Care Quality and Safety — home care | 0.0 | -719.2 | -1,706.5 | -2,490.7 | -2,542.3 | -7,458.7 |
| Infrastructure Investment — states and territories(c) | 0.0 | -286.9 | -1,343.8 | -2,159.5 | -2,163.8 | -5,953.9 |
| Building Skills for the Future — Boosting Apprenticeship Commencements wage subsidy — expansion | -139.7 | -1,506.7 | -1,033.2 | -1.1 | 2.0 | -2,678.6 |
| Mental Health | 0.0 | -413.3 | -547.2 | -484.8 | -565.6 | -2,010.9 |
| COVID-19 Response Package — vaccine purchases and rollout(d) | -536.8 | -1,317.7 | -11.1 | -7.2 | -7.2 | -1,880.0 |
| Women’s Economic Security Package | 20.7 | -18.1 | -531.8 | -645.1 | -653.5 | -1,827.7 |
| COVID-19 Response Package — aviation and tourism support — continued(e) | -965.3 | -818.9 | -3.8 | 0.0 | 0.0 | -1,788.0 |
| Guaranteeing Universal Access to Preschool | 16.0 | -156.4 | -472.2 | -486.7 | -523.3 | -1,622.6 |
| Building Australia’s Resilience(b) | -0.1 | -294.6 | -350.5 | -329.5 | -262.1 | -1,236.8 |
| Local Roads and Community Infrastructure — extension | 0.0 | -400.7 | -600.7 | 0.0 | 0.0 | -1,001.5 |
| Road Safety Program — extension | 0.0 | 0.0 | -1,000.0 | 0.0 | 0.0 | -1,000.0 |
(a) Impact on underlying cash balance. Figures may not sum due to rounding.
(b) Figures presented are net of related receipts.
(c) Sum of Infrastructure Investment – Australian Capital Territory; New South Wales; Northern Territory; Queensland; South Australia; Tasmania; Victoria; and Western Australia.
(d) Figures include the financial implications for agreements that are not for publication (nfp) due to commercial in confidence.
(e) The financial implications for the Domestic Aviation Network Support and the Tourism Aviation Network Support programs are not for publication (nfp) due to commercial sensitivities.
Appendix E: Detailed economic forecasts
| Outcomes(b) | Forecasts | |||
|---|---|---|---|---|
| 2019‑20 | 2020‑21 | 2021‑22 | 2022‑23 | |
| Real gross domestic product | -0.2 | 1 1/4 | 4 1/4 | 2 1/2 |
| Household consumption | -3.0 | 1 1/4 | 5 1/2 | 4 |
| Dwelling investment | -8.1 | 2 1/2 | 0 | -1 1/2 |
| Total business investment(c) | -2.0 | -5 | 1 1/2 | 10 |
| By industry | ||||
| Mining investment | 6.8 | 1/2 | 3 | 3 1/2 |
| Non-mining investment | -4.5 | -6 1/2 | 1 1/2 | 12 1/2 |
| Private final demand(c) | -3.2 | 3/4 | 4 1/2 | 4 1/2 |
| Public final demand(c) | 5.5 | 5 3/4 | 5 | 1 3/4 |
| Change in inventories(d) | -0.3 | 1/4 | 0 | 0 |
| Gross national expenditure | -1.4 | 2 1/2 | 4 3/4 | 3 3/4 |
| Exports of goods and services | -1.8 | -8 | 4 | 3 |
| Imports of goods and services | -7.4 | -4 | 6 1/2 | 9 1/2 |
| Net exports(d) | 1.2 | -1 | – 1/4 | -1 1/4 |
| Nominal gross domestic product | 1.7 | 3 3/4 | 3 1/2 | 2 |
| Prices and wages | ||||
| Consumer price index(e) | -0.3 | 3 1/2 | 1 3/4 | 2 1/4 |
| Wage price index(f) | 1.8 | 1 1/4 | 1 1/2 | 2 1/4 |
| GDP deflator | 1.9 | 2 1/2 | – 1/2 | – 1/2 |
| Labour market | ||||
| Participation rate (per cent)(g) | 63.4 | 66 1/4 | 66 1/4 | 66 |
| Employment(f) | -4.2 | 6 1/2 | 1 | 1 |
| Unemployment rate (per cent)(g) | 6.9 | 5 1/2 | 5 | 4 3/4 |
| Balance of payments | ||||
| Terms of trade(h) | 0.9 | 10 | -8 | -10 1/2 |
| Current account balance (per cent of GDP) | 1.8 | 3 3/4 | 1 1/4 | -2 1/4 |