2020 – 2021 Federal Budget – ‘The Road to Recovery’

Welcome to Advivo’s summary of what we believe are the most relevant points for businesses from the 2020 – 2021 Federal Budget announced last night, unusually in October rather than May, reflecting an extraordinary year in Australia’s history. Treasurer, Josh Frydenburg has delivered a budget with this year’s theme about jobs and investment, and the necessary steps Australia must take on the long road back to restore the economy to pre-pandemic levels.

Our comments are predominantly focused on the measures that affect businesses and their owners.

The impact of some of the budget items such as infrastructure spending will be contingent on how well and how quickly these are managed by the relevant State governments. This will be of special interest here in Queensland with a state election at the end of this month throwing its influence onto these items.

We have included the full budget report from Wolters Kluwer which provides greater detail and we have cherry picked the key points affecting businesses and their owners below.


  • Income tax bracket changes bought forward by 2 years and retrospectively from 1 July 2020. We are yet to see the full detail on how this will be implemented.
  • LMITO (Low- and Middle-Income Tax Offset) to be extended for the 2021 financial year.
  • LITO (Low Income Tax Offset) increases bought forward retrospectively to 1 July 2020.


  • Extension of the immediate tax deduction for capital items to larger businesses and for a longer time period for all will encourage businesses that are able to do so to spend, boosting other businesses as well as their own.
  • Loss carry back measures allowing companies with current losses to recover some tax paid in prior years will certainly be welcomed however this is limited to businesses trading via companies and so will not provide any relief to trusts and sole traders.
  • Combination of the two above items by savvy company owners may help to fund some of the capital outlays required for the new investment made.
  • Up to 12 months of wages assistance for employers making new hires via the JobMaker Hiring Credit will be welcomed by employers tentative to hire in uncertain economic conditions.
  • A 50% wage subsidy for new apprentices will also encourage new hires in some industries, provided there is demand in these industries to support them.
  • Increased R&D refund for smaller businesses will encourage businesses to innovate.
  • The potential of retaining the temporary ability for company meetings to be conducted virtually and for directors to sign documents electronically is welcome and should be encouraged to enable the Corporations Act to keep up with modern reality.
  • Reduced compliance requirements for FBT reporting are welcomed however given they don’t remove the requirement for record-keeping we’re unsure what impact these will have on smaller businesses.
  • Expanded free support for small business owners facing mental health challenges via Beyond Blue’s NewAccess will, unfortunately, be bound to be well utilised by these facing major challenges in the current environment.


  • Stapling of a super account to an individual to allow an employer to obtain the fund details from the ATO will hopefully be a simple and straightforward process for employers.
  • Initiatives to allow greater comparison for super fund members of their account performance and to encourage under-performing funds to improve are commendable in an industry where many members pay little attention to what is going on with their money.

It will remain to be seen how much these measures stimulate the Australian Economy and help to keep businesses afloat.

For more detail please see the full budget report from Wolters Kluwer.

If you have any questions or concerns, feel free to contact us today at Advivo. Call us on 07 3226 1800 or send us a message through our Contact page.