11th May, 2021

Federal Budget 2021: More focus on health outcomes and women best for business

Tonight’s highly anticipated Federal Budget 2021-22 revealed a suite of policies that will help keep vulnerable workers employed, and keep businesses open.

The Budget has laid the groundwork for small businesses to play an important role in the country’s economic recovery as the world navigates a new normal through the pandemic.

Healthcare spending is high on the agenda, while mental health measures will give those small business owners that need it a helping hand after one of the most stressful years in business on record.

There’s been a lot of campaigning for better support for women in the Budget this year, particularly how present the topic has been in the news cycle — and for good reason.

Debra Anderson, registered tax agent, accountant and industry expert, says the Budget appeared to have strong measures in place for small businesses to get back on track, with tax cuts rolled out and measures to support spending.

Small businesses will have to pay additional super, however.

“It looks to be a Budget that supports women, with a number of measures rolled out that will create some equality in the system – such as childcare support and moves to ensure women are elevated to leadership roles,” said Anderson.

Collectively, these measures will go some way towards helping SMEs to lead the country’s economic recovery and keeping business ticking. In some cases, they will help ensure that workers are available to work no matter their situation, while businesses themselves can rest assured they remain open.

“We have come so far since the height of the pandemic. But tonight we go further. Our plan is working, and Australia’s economic engine room is roaring back to life,” Treasurer Josh Frydenberg said in his announcement.

6 additional Budget measures supporting businesses through the recovery

1. Vaccine roll-out

The first priority is keeping Australians safe, prompting a further $1.9 billion for the roll-out of vaccines to be announced.

Funding for the roll-out of COVID-19 vaccines includes administering vaccines, managing distribution and logistics, recording and monitoring data, communications and supporting each state and territory. The government might not be flagging the opening of international borders until 2022 at earliest, but it wants us to be able to continue travelling, free from lockdowns, within the country in the meantime.

Vaccination will of course spell a much more normal existence for small businesses, including a return to offices for those still working remotely and greater spending.

2. Tax cuts for low and middle income earners

Support for households and to create more jobs, the Government will deliver an additional $7.8 billion in tax cuts by retaining the low and middle income tax offset.

Around 10.2 million low and income middle earners will benefit from new and additional tax cuts to support economic recovery and build on tax cuts announced in previous years. This means individuals will receive tax breaks of up to $1,080 and or $2,160 for dual income couples.

“And that’s good news for SMEs, with more money in the pocket for discretionary spending,” said Anderson.

3. $450 super threshold scrapped

Employers will need to make super guarantee payments for more employees after the removal of the $450 monthly minimum income threshold.

Currently measures mean that employers don’t need to pay super to employees who earn less than $450 per month, but this will changes from 1 July 2022.

This threshold will be removed entirely in a bid to bolster super balances and build equity in the system given the majority of workers who earn less are women.

You’ve got to spend money to make it, and this measure will provide low income earners with the peace of mind that their employees will be better off in retirement.

4. Investment in skills, business resilience and women leaders

Spending to the tune of $38.3 million to expand the Women’s Leadership and Development Program was announced. This will help improve outcomes for women in areas such as job creation, economic security, safety and international engagement.

This is mirrored in an expansion of the childcare subsidy, with $1.7 billion spent to increase the subsidy for the second and subsequent child announced. The annual cap will also be removed from 1 July, 2022.

The measure is designed to reduce disincentives to work, adding up to 300,000 hours of work per week to the Australian economy, the equivalent of 40,000 individuals working an extra day a week. This is expected to bolster the level of GDP by up to $1.5 billion per year, with 250,000 families expected to benefit.

A further $42.4 million will be spent helping women to pursue STEM qualifications as part of the National Careers Institute Partnership Grants program and the JobTrainer program will also be extended for a further 12 months as part of a $506 million package to support SMEs to employ apprentices and trainees with a 50 percent sage subsidy of up to $28,000 per year.

5. Mental health support measures

Welcome news for small business owners hanging on after the toughest year in business on record, with $2.3 billion in improved and expanded services to ensure all Australians who need mental health support can access it being rolled out.

The funding will go to mental health prevention and treatment services, including new centres across the country for mental health and suicide prevention, and support for vulnerable groups.

6. Safe at work, at home and online

Funding to provide immediate support for the victims of domestic violence will help victims who escape dangerous situations. It will also assist women to access appropriate and timely specialist services.

Cash payments for women escaping domestic violence measures for women and children experiencing family and domestic violence will also be rolled out. There is also funding to help women navigate the justice and legal system.

A Respect@Work response working with states and territories and employers to prevent and address sexual harassment in the workplace was announced, which includes funding of $5.3 million for initiatives such as primary prevention programs and research into sexual harassment.

In addition, funding for frontline support to address sexual harassment in the workplace was announced as part of a $6 million fund to enhance the Workplace Gender Equality Agency to better prevent and respond to workplace sexual harassment.

A $26.2 million fund to improve the safety of online spaces for women and children was also announced. This includes a new program supporting children experiencing technology-facilitated abuse.

Looking to the future of a healthy economy

It’s been a lot to unpack for small businesses.

In summary, the Federal Budget contains a raft of measures that will support economic recovery not only by supporting businesses directly, but by also supporting at-risk and vulnerable workers that might otherwise disengage from employment.

And with these changes in place, we can all hope that this year will be better than the last.


Want to hear more about what the 2021 Federal Budget means for small business?

See our expert panel featuring the The Hon. Stuart Robert MP, Minister for Employment, Workforce, Skills, Small and Family Business, Dr Craig Latham, Deputy, Small Business and Family Enterprise Ombudsman and Helen Lea, Chief Employee Experience Officer, MYOB, discuss what the Budget means for your small business (from Friday 21 May at 9:30am-10:15 AEST). View it here today.