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Federal Budget 2021

From changes to R&D to support for women: Here’s what we think the budget will include

The federal government has hinted that changes to tax relief and more women-focused measures will be included in this year’s budget.
Lois Maskiell
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Parliament House small business owners

The Treasurer Josh Frydenberg will deliver his third federal budget tonight in Parliament, and his second budget in just six months.

And while the Morrison government has made a few sure announcements about what the budget will include, it has left a lot open for discussion.

Here’s a list of what we’re expecting will be addressed in tonight’s highly anticipated budget.

Extension to low and middle income tax offset 

Pre-budget reports suggest the government will extend a temporary tax cut for low and middle income earners for another 12 months, as part of a plan to maintain confidence in the economy.

The low and middle income tax offset was due to finish at the end of this financial year; however, the government is reportedly planning to use the upcoming federal budget to extend the tax cut for another 12 months.

The offset gives low and middle income earners an end-of-financial year rebate of up to $1080 for singles and $2160 for couples.

Continuing the offset for another year is expected to benefit approximately 10 million Australians, and cost $7 billion to the budget bottom line.

More changes to R&D

Last week, a select committee on fintech and regtech released its second interm report, recommending R&D Tax Incentive (RDTI) payments to be paid out on a quarterly basis.

The recommendations came just over one week before the federal budget, meaning the government could take on advice from the industry that was submitted to the committee.

The Senate Select Committee on Financial Technology and Regulatory Technology suggested that different assessment methodologies should be used for the scheme.

“Consideration” should also be given to a separate, standalone RDTI scheme for software startups, it said.

The committee also advised that payments for successful applicants should be made on a quarterly basis, to help businesses with cashflow without increasing the overall cost of the scheme.

More to support women

The government is expected to deliver a women-focused budget tomorrow, after it faced criticism last year for not doing more to address women’s economic security.

The government first announced it would address the super gap that exists between women and men in April, with the expenditure review committee looking at ways to enable women to top up their super.

But super disparity is just one part of addressing the gender inequality puzzle.

A group of leading women and representatives of parents, including Georgie Dent, executive director of The Parenthood, and Michele O’Neil, president of the Australian Council of Trade Unions, signed a joint policy statement urging the government to prioritise the economic security and safety of women.

The statement called for reforming early childhood education, paid parental leave, funding for family and domestic violence services and funding for aged care.

Of those demands, we’ve seen the government pledge an additional $1.7 billion in funding for childhood education and a reported $18 billion for aged care.

Cybersecurity for SMEs

Members of the business community, including CPA Australia, have called for the government to invest more in cybersecurity in this year’s budget.

Despite the government announcing a $1.2 billion digital economy plan, only $50 million will be spent on cybersecurity services in government, data centres and telecommunications networks. Of that funding, none has been specified for small and medium businesses.

Over the last 10 years, the government has committed $1.66 billion over 10 years in cybersecurity grants, and just last week $6.9 million in grant funding awarded under the government’s Cyber Security Business Connect and Protect Program.

Whether we’ll see more grant initiatives backing projects that help small businesses identify and address security risks will be revealed tonight.

Extension to JobTrainer

The federal government’s JobTrainer program will reportedly extended for another 12 months, as part of a plan to ensure young Australians have in-demand skills.

The extension of the program, which will likely be delivered through a $1 billion package in the May 11 budget, will offer thousands of Australians low-fee or free courses in fields such as IT, aged care and childcare.

JobTrainer has been a two-pronged program, with one part offering affordable training to young adults through a partnership with state TAFEs. The second function of JobTrainer is to give employers a 50% wage subsidy of up to $28,000 per year, if they hire a young person.

Overhaul of employee share schemes

As part of the budget, a $500 million reform to employee share ownership schemes will reportedly boost incentives for startups and emerging businesses to offer their staff equity.

Employee share schemes (ESS) give employees the benefit of buying shares in the company they work for at a discounted price, or the chance to buy shares in the company in the future.

Currently, employees are eligible for tax concessions on shares owned through an ESS. However, once an employee leaves a workplace, those concessions are no longer applied to their shares.

As part of the government’s $500 million overhaul, former employees will not be required to pay tax on shares after they leave a business.

And, for unlisted companies, the cap on the value of shares sold or lent to employees will increase to $30,000, up from $5,000.

Explore the series

Federal Budget 2021
  1. Morrison unveils $120 million deregulation package for business ahead of May budget
  2. The Morrison government has pledged $539 million to low-emissions tech — will any of it reach Aussie startups?
  3. Budget 2021: Low and middle income earners set to receive tax offset for another year
  4. Business groups call for changes to childcare subsidies and paid parental leave in the Federal Budget 2021
  5. COVID-19 relief, digital transformation and training: Here’s what SMEs want from the federal budget
  6. Budget 2021: Federal government is urged to prioritise women’s economy security and safety
  7. Frydenberg says the budget will spend big to boost the economy. Here’s what SMEs want to see
  8. These three economic facts point to big spending in the federal budget, economist says
  9. Budget 2021: Private higher education providers to get $53 million support package, as Frydenberg hints at cybersecurity focus
  10. “Unlikely to benefit”: Extra $1.7 billion for childcare will help some families, but won’t improve affordability for most
  11. ‘Don’t miss incentives’: How SMEs can understand the budget in one hour
  12. A quarterly cash injection? Senate committee recommends changes to R&D Tax Incentive payments
  13. Morrison government to splash small brewers and distillers with $225 million in excise tax relief
  14. Further insolvency reforms on the table, but government warned against “piecemeal” approach
  15. Australia’s budget is more about values than it is about money. Here’s what to look for
  16. Budget 2021: Depreciation allowances for intangible assets will be a boost to startups and SMEs
  17. “Open for business”: Video game industry welcomes 30% tax offset after eight years of lobbying
  18. From tech advice to tax overhaul: Here’s what the government’s $1.2 billion digital economy plan means for SMEs
  19. Josh Frydenberg made a lot of promises in last year’s budget. How did they work out?
  20. Budget 2021: How the small business ‘digital solution’ program works
  21. A lack of cybersecurity measures in the government’s digital strategy will leave SMEs vulnerable
  22. Digital economy plan will put VC tax concessions under review
  23. Soaring house prices or cutting down unemployment? What the RBA is choosing to value in the upcoming budget
  24. Tax offset announcement puts South Australia at the forefront to attract and foster video game developers
  25. Budget 2021: Here are 12 things we know will be included in the federal budget tomorrow
  26. Treasurer hints at changes to COVID-19 employment schemes, saying an extension to JobTrainer and end of JobMaker are on the table
  27. Startup Instaclustr partners with Uni of Canberra to fill tech skills gap, ahead of job-focused federal budget
  28. From changes to R&D to support for women: Here’s what we think the budget will include
  29. Here’s what SMEs want from tonight’s budget
  30. Federal budget to revamp employee share schemes for startups and emerging businesses in $500 million package
  31. Budget 2021: What are tech leaders looking out for?
  32. Small business ombudsman welcomes budget proposal for SMEs to pause debt recovery action in the AAT
  33. Budget 2021: Massive asset write-off and loss carry-back schemes extended for SMEs
  34. Budget 2021: Plenty for SMEs in big-spending, election budget bonanza
  35. Budget 2021: Government procurement for SMEs in focus
  36. Budget 2021: $500 million employee share scheme reform to help tech companies attract talent
  37. Budget 2021: New franchise disclosure registry to be established as Ombudsman’s office gets more funding
  38. Not one, but two elections: government’s cash splash is designed to keep Liberals in power for years to come
  39. Budget 2021: Skills in focus with JobTrainer extension and apprenticeships boost
  40. Superannuation guarantee: $450 monthly threshold scrapped in 2021 budget
  41. Budget 2021: No change to the RDTI, but some bright spots for startups
  42. Budget 2021: $206.4 million ‘patent box’ scheme to encourage medtech and biotech investment 
  43. Federal budget unpacks details of the government’s $124 million AI spend
  44. Budget 2021: $8 million for campaign to promote small and family-owned businesses
  45. Spend big, go low: Frydenberg’s big budget aims to drive unemployment down
  46. The winners and losers of last night’s federal budget
  47. Budget 2021: The government listened to women… but is it enough?
  48. Asset write-off explained: How your business can take advantage of the 12-month extension
  49. Budget 2021: What works for startups, and what doesn’t? Labor’s Ed Husic and tech leaders react
  50. ‘A 7.5 star budget’: Small business advocates welcome tax relief but say more is needed to help SMEs digitise
  51. In a bumper budget for small business and startups, here are eight policies that were missing
  52. No international travel until mid-2022? Here’s what the budget tells us about border closures and tourism
  53. Digital economy: The budget spend needs to be far bigger to stop Australia from “sliding down the rankings”
  54. Australian fashion industry receives $1 million budget boost to grow exports and create a new trademark
  55. From wage compliance to drafting contracts: Here’s how the budget’s $134.6 million deregulation package will help SMEs
  56. Budget 2021: What’s in it for women entrepreneurs? Not much
  57. Budget 2021: Everything you need to know about changes to superannuation
  58. Labor’s budget reply: Albanese promises loans for young entrepreneurs, green apprenticeships and IR reform
  59. Inaction on paid parental leave slows economic progress for women, research finds
  60. “I was expecting more”: Jo Burston discusses the so-called ‘budget for women’
  61. Industry expert says the patent box plan might see ‘more revenue lost than recouped’
  62. ‘A red tape buster’: Small business ombudsman backs the government’s streamlined licensing scheme for skilled trades workers
  63. Half of Australians think budget support for SMEs adequate
  64. The government’s approach to supporting women in leadership is ‘designed to fail’ says GoKindly founder Laura Conti

About the author

Lois Maskiell is a journalist at SmartCompany.

Similar topics

changes to super
federal budget 2021
low and middle income tax offset
r&d tax incentive

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