Some of the key features of the budget include; substantial changes to income tax brackets that have been brought forward to 1 July this year; some additional welfare payments, significant new infrastructure spending commitments; a new instant asset write-off capability for most businesses, as well as major reforms to superannuation aimed at creating a more sustainable retirement system.
To finance its extraordinary spending and investment plan, the Government will increase Australia’s public sector debt levels to almost one trillion dollars over the coming years. The Government’s hope, and indeed expectation, is that higher economic growth, combined with historically low interest rates, will allow the country to pay off this enormous debt within a reasonable timeframe.
At the same time, the Government’s budgetary plans are clearly based on its optimistic anticipation that the global economic crisis caused by COVID-19 will gradually weaken over the next year or so, due in large part to the distribution of a safe and effective vaccine from early next year.
Time will tell on this.