Budget 2020-21: Infrastructure & Investment Measures to Turn Around the Australian Economy
The Australian Government’s budget, released on 6 October 2020, concedes that an economic decline will be hard to avoid over the remainder of this year, reflecting the impacts of the lockdown necessary to combat COVID-19. Real GDP is expected to fall by one and a half percent in 2020-21. The economy is then projected to turnaround and achieve growth of four and three-quarter percent in 2021-221.
Measures announced in the budget are expected to drive the swift turnaround. They include:
- Investment incentives. Businesses will be able to deduct the full cost of capital assets purchased or installed by 30 June 2022. Small and medium businesses will also be able to apply “full expensing” to second-hand assets.
- Employment incentives. A new JobMaker hiring credit scheme to encourage businesses to preference the hiring of people up to 35 years of age, supplementing the temporary JobKeeper program, and temporary expansion of the income support provided in the JobSeeker program. The Australian Government will fund 100,000 new apprenticeships through the $1.2 billion Boosting Apprenticeship Commencements wage subsidy.
- Investments in hard infrastructure. $14 billion in new and fast-tracked infrastructure projects. That includes bringing forward $7.5 billion of spending on road and rail projects, a new $2 billion investment in road safety upgrades, and $1 billion for local councils to upgrade roads, footpaths and street lighting. The Government is also expanding its investment in the broadband network (NBN Co) and is providing funding to accelerate the rollout of the 5G network.
1: Australian Department of the Treasury 2020, Budget 2020-21, Budget Strategy and Outlook Budget Paper No. 1, page 2-7.