This article is from the Australian Property Journal archive
FIRST home buyers, business and infrastructure were among the big winners in Budget 2020-21.
Treasurer Josh Frydenberg said the government will give tax breaks to businesses of more than $30 billion in immediate expensing and loss carry-back measures and increase the infrastructure pipeline by $10 billion $110 billion over 10 years.
First home buyers
First home buyers are among the big budget winners, as the federal government opened an extra 10,000 places for the First Home Loan Deposit Scheme, while tipping in a further $1 billion towards construction of affordable housing.
The treasurer said the measures will see thousands more Australians achieve home ownership, as well as support thousands of jobs in the construction industry.
The scheme allows first home buyers to obtain a loan to build a new home or purchase a newly built home with a deposit of as little as 5%. Treasurer Frydenberg confirmed the additional slots in the scheme, which has seen both previous rounds, totalling 20,000 places, taken up entirely.
First home buyers will also be able to take advantage of the government’s First Home Super Saver Scheme and the HomeBuilder grant, as well as potentially dipping into state and territory grants and concessions.
While the $680 HomeBuilder grant has been credited with giving the housing and construction markets a boost in recent months, no extension was announced.
The budget forecasts dwelling investment to fall 11% in 2020-21, before rising 7% over 2021-22.
Australia’s projected population is now expected to be one million fewer people than previous forecasts – locked-down Victoria will take the heaviest hit. The budget arrived two weeks after research by the National Housing Finance and Investment Corporation (NHFIC) estimated the COVID-19 pandemic could slash demand for new housing nationwide by between 129,000 and 232,000 dwellings over the next three years.
Meanwhile, an additional $1 billion was committed to support construction of affordable housing via the NHFIC, taking total concessional finance made available to community housing providers to $3 billion. This is in addition to $4.6 billion provided in rental assistance each year.
The NHFIC will be subject to an independent review over the coming years to ensure it is improving housing.
The treasurer also announced $150 million would go towards the Indigenous Home Ownership Program to construct new homes in regional areas, aimed at creating more jobs and helping indigenous families buy their own home.
Ongoing funding includes $1.6 billion for the National Housing and Homelessness Agreement, and $237.2 million for new housing, refurbishments housing infrastructure in remote Queensland and the Northern Territory.
Business tax breaks
For businesses, the government announced temporary investment tax incentives worth $26.7 billion for temporary full expensing and $4.9 billion for temporary loss carry-back.
Treasurer Frydenberg said the combination of the immediate expensing and loss carry-back measures will create an additional 50,000 jobs across the country.
Under the measurer, losses incurred to June 2022 can be offset against prior profits made in or after the 2018‑19 financial year.
The government will also 99% of businesses to write off the full value of assets they purchase.
Businesses with a turnover of up to $5 billion will be able to instantly write off the cost of eligible depreciable assets acquired from 7:30pm on 6 October 2020 and first used or installed by 30 June 2022.
Infrastructure
The government will increase the infrastructure investment pipeline to $110 billion over 10 years. The government will provide an additional $10.0 billion in funding towards projects over the next four years bringing total commitments for new and accelerated projects since the onset of the COVID-19 pandemic to $14.0 billion across the forward estimates.
Projects currently under construction are supporting around 100,000 direct and indirect jobs over their construction periods, with the government’s additional investments since the onset of COVID-19 supporting a further 40,000 direct and indirect jobs.
