Treasury provides advice, analysis and legislation to Government to deliver economic policies and programs, supporting the effective management of the Australian economy.
The Treasury has offices in Canberra, Sydney, Melbourne and Perth. It has been increasing regional engagement to deepen its understanding of the challenges and opportunities facing regional economies.
There are a number of entities in the Portfolio that are nationally dispersed, such as the Australian Taxation Office and the Australian Bureau of Statistics (ABS). Office locations for these entities include Albury, Burnie, Geelong, Gosford, and Townsville. The ABS also hosts the National Data Acquisition Centre in Geelong, and maintains a field interviewer workforce of approximately 450 located in communities across Australia.
The ABS produces a range of data about Australia's regions through the Census of Population and Housing, and other household and business collections. Much of this data is available through its regional data portal (Data by Region). Recently, the ABS has expanded the range of regional statistics in response to the need for information to support regional recovery from recent events including bushfires and COVID-19. These statistics include detailed regional data on housing, health and disability.
As at 30 June 2020, the Treasury Portfolio employed 26,800 staff under the Public Service Act 1999. Of this total, 10,364 staff (38.7 per cent) were employed in Canberra, central Melbourne and central Sydney; 13,721 (51.2 per cent) were employed in other capital cities; and 2,715 staff (10.1 per cent) in other locations (including international posts).
Further details are provided in the Treasury Portfolio Budget Statements.
New initiatives
Bushfire Response Assistance – tax treatment of disaster recovery and volunteer firefighter payments
In recognition of the extraordinary 2019–20 bushfire season, the Australian Government made relief and recovery payments and benefits, as well as support payments to volunteer firefighters, free from tax.
Australian governments provide a range of disaster assistance payments and benefits to entities, including individuals, but typically not all of these payments are tax-free. This initiative ensures relief and recovery payments made by all levels of government, for the purpose of providing relief or assisting in the recovery efforts of entities and individuals affected by the 2019-20 bushfires, are free from income tax.
Additionally, this measure ensures the payments made to eligible volunteer firefighters, to compensate them for loss of income as a result of volunteering, are free from tax.
This measure formed part of the Government’s Bushfire Response Package in the Economic and Fiscal Update July 2020.
COVID-19 Response Package – introducing the backing business investment incentive
The Australian Government has introduced a time limited investment incentive that temporarily allows businesses with aggregated turnover of less than $500 million to deduct capital allowances for eligible depreciating assets at an accelerated rate. This initiative has been designed to encourage business investment, including in regional areas.
Generally, to be eligible to apply the accelerated rate of deduction, the depreciating asset must satisfy a number of conditions, including that the asset be:
- new and not previously held by another entity (other than as trading stock or for testing and trialling purposes)
- first held on or after 12 March 2020
- first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021
- not be an asset to which an entity has applied the instant asset write off rules or depreciation deductions.
Eligible businesses with an aggregated turnover of less than $500 million can deduct an additional 50 per cent of the asset cost in the year of purchase.
This measure formed part of the Government’s COVID-19 Response Package in the Economic and Fiscal Update July 2020
COVID-19 Response Package – boosting cash flow for employers
The Australian Government is providing tax-free cash flow boosts of between $20,000 and $100,000 to eligible small and medium businesses and not-for-profit organisations that employ individuals. Eligible entities automatically receive payments upon lodgement of relevant activity statements for the March to September 2020 reporting periods. This supports the connection between employers and employees and has helped entities continue to operate through the economic downturn associated with the COVID-19 pandemic.
This measure formed part of the Government’s COVID-19 Response Package in the Economic and Fiscal Update July 2020.
COVID-19 Response Package – increasing and extending the instant asset write-off
The Australian Government has increased and extended the instant asset write-off to provide more support for businesses to invest.
The instant asset write-off threshold was increased to $150,000 (up from $30,000) with access expanded to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 31 December 2020.
Around 3.5 million businesses, including in regional areas, with aggregated annual turnover of less than $500 million are eligible to access the $150,000 instant asset write‑off. Eligible businesses can immediately deduct purchases of eligible assets costing less than $150,000 from 12 March 2020 until 31 December 2020. The threshold applies on a per asset basis, so eligible businesses can instantly write-off multiple assets.
This measure formed part of the Government’s COVID-19 Response Package in the Economic and Fiscal Update July 2020.
HomeBuilder
The Government’s HomeBuilder program, introduced on 4 June 2020, is supporting jobs in the residential construction sector by providing eligible owner-occupiers with a grant of $25,000 to help towards building a new home or substantially renovating an existing home. HomeBuilder is available to assist eligible owner-occupiers in regional Australia, including those affected by bushfires, floods and other natural disasters.
JobKeeper Payment
On 30 March 2020, the Australian Government took decisive action to address the economic consequences of the COVID‑19 pandemic by providing unprecedented support to impacted Australian businesses and their employees through the JobKeeper Payment.
The Government provided $1,500 per fortnight per eligible employee where a business or not-for-profit projected a monthly or quarterly turnover decline of 30 per cent decline in their turnover, if their annual turnover was under $1 billion; or a 50 per cent decline, if their annual turnover was over $1 billion in a relevant month or quarter. Registered charities were able to receive support where they projected a 15 per cent decline in turnover.
The JobKeeper Payment is one of the largest fiscal and labour market interventions in Australia’s history. To date the Jobkeeper Payment has supported more than 3.8 million individuals, in over one million businesses. It has provided support to businesses and individuals across all sectors and all parts of the country.
On 21 July 2020, the Government announced it was extending the JobKeeper Payment for a further 6 months from 28 September 2020 to 28 March 2021, with the payment tapered and targeted to those businesses that continue to be most significantly impacted by the economic downturn.
On 7 August 2020, the Government announced further changes to the JobKeeper Payment, in response to the evolving COVID-19 situation in Victoria, which resulted in an additional estimated cost of $15.6 billion. The changes to the JobKeeper Payment eligibility criteria, which related to the employment reference date and turnover decline, ensured businesses and employees most affected by the COVID‑19 related shut-downs continue to receive support. Overall, the JobKeeper Payment is now estimated to cost $101.3 billion.
JobMaker Hiring Credit
The Australian Government will provide support to both businesses and young job seekers through the JobMaker Hiring Credit, including for those in regional areas. The JobMaker Hiring Credit will help to accelerate growth in employment during recovery by giving businesses incentives to take on younger employees.
The JobMaker Hiring Credit will be available to employers from 7 October 2020 for each new job they create over the next 12 months, when they hire an eligible young person aged 16 to 35 years. This will help young people in regional areas access job opportunities as the economy recovers.
For up to 12 months from the date of employment of an eligible new hire, eligible employers will receive $200 per week if they hire an eligible employee aged 16 to 29 years, or $100 per week if they hire an eligible employee aged 30 to 35 years.
To be eligible, the employee will have to have received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months at the time of hiring. Employers must demonstrate that they have increased their overall employment to receive the JobMaker Hiring Credit. Eligible employees will need to work for a minimum of 20 hours per week, averaged over a quarter.
First Home Loan Deposit Scheme – extension
The Australian Government is building on the success of the First Home Loan Deposit Scheme by introducing an additional 10,000 places in 2020–21 to allow first home buyers, including those in regional Australia, to obtain a loan to build a new dwelling or purchase a newly built dwelling with a deposit of as little as 5 per cent.
National Housing Finance and Investment Corporation (NHFIC)
The Australian Government is supporting the National Housing Finance and Investment Corporation (NHFIC) by increasing its guaranteed liabilities cap from $2 billion to $3 billion. This will allow NHFIC to continue providing low-cost finance to improve housing supply, particularly for social and affordable housing, including in our regions.
Small Business Bushfire Financial Counselling Support Line
As part of the Australian Government’s National Bushfire Recovery Fund (NBRF) to help Australians recover from the 2019–20 bushfires, $3.5 million has been allocated over two years commencing 2019-20 to establish a financial counselling support line service. The support line provides free, confidential and independent advice for small businesses affected by the bushfires who are experiencing financial difficulties. This supports small businesses in Regional Australia to manage the financial impact of the bushfires.
Perishable Agricultural Goods Inquiry
The Government has directed the Australian Competition and Consumer Commission (ACCC) to undertake a three-month inquiry into bargaining power in supply chains for perishable agricultural products in Australia. The inquiry will take a broad look at trading practices throughout supply chains, including the relationships between farmers, processors and retailers.
The ACCC will review the extent to which any potential bargaining power imbalances in these relationships can adversely impact the efficient operation of these markets, and the role of market structures and regulations in delivering efficient and equitable outcomes.