This week, the Federal Government unveiled its Budget 2020-21.
The announcement included a number of measures which will support the hospitality sector as it gets back on its feet and adjusts to the new COVID-normal.
Here are some of the measures that might affect our restaurant partners...
Personal tax cuts
In its 2020-21 Federal Budget, the Government is delivering an additional $17.8 billion in personal income tax relief to support the economic recovery. Low and middle income earners will receive tax relief of up to $2,745 for singles, and up to $5,490 for dual income families.
Recent research from Deliveroo revealed that 85% of Australians believe supporting their local restaurants is important. We hope that this, combined with the accelerated personal income tax cuts, means there will be more discretionary spending in the local economy.
JobMaker hiring credit
The Federal Government announced a new JobMaker incentive for businesses to employ young job seekers aged 16 to 35 years old. For each eligible employee, employers will receive the following for up to 12 months:
- $200 a week if they hire an eligible young person aged 16 to 29 years; or
- $100 a week if they hire an eligible young person aged 30 to 35 years.
This measure will both stimulate employment and help restaurant and cafe owners to gradually build back up their staff as consumer demand recovers in line with the lifting of COVID-19 restrictions.
Loss carry-backs
The Federal Government also announced a temporary tax relief by allowing eligible companies to carry-back tax losses made in the 2020-22 income years to offset tax paid on profits from the 2019 income year onwards.
A 'loss carry-back' is when tax previously paid to the ATO is refunded when a loss is subsequently incurred.
Temporary full expensing of capital assets
The Federal Budget 2020-21 also included a temporary measure to allow eligible businesses to claim an immediate deduction for the full cost of eligible capital assets.
Assets must be acquired from 7:30pm AEDT on 6 October 2020 and first used or installed by 30 June 2022. These assets include items that are used in the running of your business, such as kitchen equipment, phones or point of sale systems.
The announcement extends the current instant asset write-off by giving businesses an extra six months to first use and install assets, until 30 June 2021.
A new insolvency process
The Federal Government will make some of the biggest reforms to Australia's corporate insolvency framework in nearly 30 years.
These changes announced include two new processes to commence on 1 January 2021:
- A more streamlined process for small businesses to restructure debts
- A streamlined and lower-cost liquidation process for small businesses
For more information, please visit the Federal Government's Budget 2020-21 website.
