Government backs business to get economy moving

Published: 7 October 2020

In a highly unusual year, the Commonwealth Government made the highly unusual decision to release this year's budget in October rather than May.  

The five-month delay served two purposes. 

First, at a time of rapid change and extreme uncertainty, it allowed the government to focus on developing a public health response and economic support package that has helped Australia manage the impact of coronavirus better than most countries.

Second, it provided an opportunity to observe before drafting a fiscal response that is more akin to a crisis management plan than a standard federal budget. 

Undoubtedly, the primary aim of this budget is to kick-start the economy using measures that will, hopefully, restore consumer confidence, encourage private sector investment and create jobs, while continuing to deliver the essential services on which Australians rely. 

But the challenges for the Australian economy remain significant. 

As many commentators have already observed, the success of this budget will depend largely on two, highly unpredictable factors: virus containment and economic confidence.  

Further outbreaks of the virus are likely until a proven vaccine becomes available: the timing and efficacy of which remains unknown. 

Add further uncertainty surrounding the impact of the global economy on the domestic outlook, and the challenge for this government is to convince Australians, businesses and consumers, that the measures contained in this budget are sufficient enough to get them spending. 

That’s why many of the measures targeting business will take effect immediately. 

Cashflow support that allows businesses to write off assets took effect immediately following the budget release, as did the JobMaker Hiring Credit and the Boosting Apprenticeships Wage subsidy. 

Tax losses can be retrospectively applied to profits going back as far as 2018-19, while a range of other measures aiming to make doing business easier will come into effect in coming months.

Only time will tell whether these measures are enough. 

More certain is that the government is backing Australian businesses to get the economy moving.

Download our Federal Budget Summary here.