They were the key takeaways from the RBA’s twice-yearly Financial Stability Review released late Friday afternoon.
This is dire news but hardly surprising.
As the report states COVID has shut down parts of the economy plunging Australia into our first recession in three decades. And while the government stimulus has provided temporary insolvency relief for companies, increased cash buffers and lowered rates of business failure in 2020 – this will all come to a head in March 2021.
The impact it will have on our community is concerning.
We know from our ongoing COVID survey that 50% of you are struggling with mental health challenges brought on by COVID stress; 38% have seen a decrease of more than half their income since March 2020 and only 41% are feeling optimistic about business success in 2021.
So where’s the good news?
According to finance guru, David Koch last week’s Federal Budget included a few things to feel positive about:
1.The tax cuts due to start in July 2022 will be brought forward 2 years to start last July. Yes that means you’ve been paying too much tax for the first 4 months of this financial year but it also means you’ll get a bigger tax refund and there will be less tax taken out of your wage from now on. For most working Australians that’s an extra $3000-$5000 (depending on your tax bracket) a year extra to go out and spend.
2. Aged pensioners will receive a $500 bonus in two equal payments in December and March.
3. There a raft of new job training programs, and billions being spent on infrastructure projects, all designed to create new job opportunities if you’re made redundant. Now for bosses. What’s in this Budget to keep them positive, keep people in a job and create more jobs;
4. As we know already, the $101 billion JobKeeper program keeps going until the end of March even though the amount is reduced and eligibility rules have been tightened.
5. For businesses not on JobKeeper they can receive a “hiring credit” of $200 a week if they add an eligible under 30 year old to their staff and $100 a week for a 30-35 year old new employee.
6. If their business makes a loss this financial year they can offset that loss against profits they’ve made in the past 2 years (usually they can only offset losses against future profits). While they’ve already paid tax on those past profits, they’ll get a refund back once the losses are offset against them.
7. Any investment in new assets for the business can be written off against their tax immediately instead of over a few years. Less tax means more money to spend or hire more staff.
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What’s your biggest concern right now? Drop me an email: lucy@pinstripemedia.com.au
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