Almost all companies, bar the mining giants or the likes of CSL will be able to immediately write off the full value of eligible assets purchased.
The initiative targets small, medium, and larger businesses with a turnover of up to $5 billion until June 2022.
The cost will be more than $26 billion and will trigger an investment boom of a different type – technology products will be in heavy demand as will machinery and equipment.
It excludes massive companies like BHP and Rio Tinto, but not miners like OZ Minerals or Newcrest or the likes of Santos.
Small and medium businesses can carry back losses incurred to June 30, 2022 to offset profits booked since 2018-19.
The cost of this is very uncertain simply because no one has any idea of the size of the losses in the next two financial years.
There’s also an extra $10 billion of infrastructure spending.
And there’s the previously announced $1.3 billion modern manufacturing plan will prioritise food and beverages; resources and minerals processing; medical products; recycling and clean energy; defence industry; and space industry.
The government estimates the economy will recover 950,000 jobs over the next four years from a combination of budget measures and the recovery in the economy, based on the crucial assumption of a widespread vaccine next year.
Employers will be offered a wage subsidy to recruit from the ranks of the unemployed in a $4 billion program that aims to support 450,000 jobs, filling a looming gap when the JobKeeper scheme ends next March.
On top of that will be the 100,000 apprentice positions that will attract $1.2 billion in subsidies (50% of the wage) over the next four years.
The new JobMaker hiring credit will be worth $200 per week for every worker aged up to 30 and $100 per week for those aged from 30 to 35, payable for the next year for new hires who work at least 20 hours per week.
In a policy backflip on research and development, the government scrapped its plan from last year to save $1.8 billion in R&D tax concessions and will instead offer $2 billion in new incentives.
Tax cuts will be delivered to 11.5 million workers within weeks in a $17.8 billion plan to jolt the economy out of recession using personal tax cuts, business investment incentives and a new subsidy for companies that hire the unemployed.
Workers will see the lower tax rates take effect on their pay packets by the middle of this month if the Senate approves the Morrison government plan to backdate the tax cuts to July 1.
Workers earning $100,000 a year will gain a tax cut worth $2,445 a year compared to their tax bill in 2018 under the plan to bring forward the second stage of the government’s tax overhaul, which was legislated last year but not meant to start until 2022.
Seeking to avoid a Senate fight on controversial changes, the government chose not to bring forward the third stage of its original tax plan, given criticism from Labor and the Greens that the changes due in 2024 deliver bigger benefits for those on higher incomes.
Workers on lower incomes will gain from an extension of the Low and Middle Income Tax Offset, which is worth up to $1,080 a year, but it cannot be claimed until they lodge their tax returns after June 30.
But as well as the tax offset, workers earning between $45,000 and $90,000 will see cuts in their PAYG that will be worth $1080.
Aged pensioners will receive a $250 payment from December and another $250 from March.
