Budget 2020-21 Federal Treasurer Josh Frydenberg delivered the 2020-21 Federal Budget, where the main focus was directed toward. • Tax cuts The Government will bring forward the income tax cuts for most income brackets that were scheduled for 2022. The low and middle income tax offset of $1,080 will remain in place for the financial year.
More Funding for the NDIS The Minister’s media release announced the government would provide $3.9 billion more for the NDIS. Some people were a bit sceptical about the announcement. Particularly given what has happened in previous years.
• Superannuation To help members avoid paying additional fees for multiple super accounts, employers will no longer create default super accounts when an employee joins their company. By July 2021 MySuper products will need to do an annual performance test and notify members each year if their fund underperformed. The Government will also release an online comparison tool called YourSuper that will compare the fees and returns for super funds.
But this doesn’t appear to be funny business with the numbers – it appears to be a genuine increase in funding. It is spread across what is called the “forward estimates”. Forward estimates are the government’s best guess about what they think they will spend in the next few years.
• Age Pension and welfare recipients People who are currently receiving certain eligible income support payments and concession cards will receive two additional payments of $250, to be paid in December 2020 and March 2021.
Let’s just look at the main part of the NDIS – what the budget papers call “reasonable and necessary support for participants”. In other words – funds for people’s NDIS plans.
• Creating jobs The Government intends to grow the economy in 2021/2022 by creating job opportunities in sectors such as manufacturing, infrastructure, medicine, recycling, food, defence, farming and tourism. There will also be a focus on increasing female workforce participation. • Health services To help look after vulnerable Australians, there will be additional funding for the National Disability Insurance Scheme, mental health and suicide prevention, and the Pharmaceutical Benefit Scheme.
If you compare the forward estimates from last year’s budget papers with the forward estimates in this year’s papers you can see the amounts have increased.
So that’s some good news. Every year the scheme gets a little bit bigger – there are more people in the scheme, and a little bit of inflation and wage growth means things can cost more. The extra funding means there is more money for those things without the need to reduce everyone’s funding. But (there’s always a but) what the figures also show is that the government certainly intends to limit growth. Because after a while (basically once they are sure transition is finished) the funding pretty much flatlines – there is only a little bit of growth. The NDIS remains underspent and yet underfunded. 5
