Big win for ‘tradies, truckies, teachers and nurses’ in Federal Budget

Tradies, teachers, truckies, farmers and nurses on low and middle incomes have scored big in the budget – but there’s a catch.

Tradies, teachers, truckies, farmers and nurses on low and middle incomes will score a $1080 tax cut in the budget that will also deliver a massive extension of tax breaks to buy a new ute or machinery.

The biggest tax break in the budget is an extension of an existing JobMaker scheme to allow businesses to write off the full value of any asset they purchase.

The extension of the JobMaker scheme for another year will deliver a stunning $20 billion in tax relief over the next four years, 10 times the value of the modest new spending of $1.7 billion on childcare.

Any business with a total income of less than $5 billion can deduct the full cost of eligible depreciable assets of any value, if acquired before October 6, 2020 and first used or installed ready for use in 30 June, 2023.

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“Tonight, we go again go further,” Treasurer Josh Frydenberg said in his budget speech to parliament on Tuesday night.

“Announcing the extension of these measures for a further year until 30 June, 2023, so a tradie can buy a new ute, a farmer a new harvester and a manufacturer expand their production line.”

The 12-month extension will provide eligible businesses with more time to secure the tax break.

The tax break is expected to reduce tax revenue by $17.9 billion over the forward estimates and $3.4 billion over the medium term as the measure brings forward deductions that would have been made in future years.

Treasurer Josh Frydenberg says ‘Australia is coming back’. Picture: Gary Ramage

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As expected, the Morrison government has extended one-off tax cuts worth $1080 for singles and $2160 for couples for another year in the 2021 budget.

However, the budget papers confirm the largesse could be axed next year – leaving these workers facing a higher tax bill.

In other words, the extension is only for another year with no guarantees it will be extended again.

“It’s designed as a stimulus measure, because we are not out of the pandemic yet,’’ Mr Frydenberg said.

The tax cuts are aimed squarely at low and middle income earners who earn up to $126,000 a year.

However, to reap the full benefit of up to $1080 you need to be earning less than $90,000 a year.

“The real beneficiaries of the tax cuts in tonight’s budget are low and middle income earners,” the Treasurer said. “The tradie and the truckie and the teacher and the nurse, who earn between $48,000 and $90,000.”

Mr Frydenberg also hailed Australia’s remarkable recovery from the COVID-19 pandemic as a remarkable international success story.

“Australia is coming back,” he said.

“In the face of a once-in-a-century pandemic, the Australian spirit has shone through.”

In his budget speech, Mr Frydenberg noted that while Treasury feared unemployment could reach 15 per cent and the economy could contract by more than 20 per cent, that never happened.

It was a prospect that would have meant two million Australians unemployed.

“Today the reality is very different,” the Treasurer said.

“Ahead of any major advanced economy, Australia has seen employment go above its pre-pandemic levels. Australia’s fate could have been so much worse. On the health front, the catastrophic loss of life seen elsewhere has been averted.”