Treasury’s role is to support and implement informed decisions on policies for the good of the Australian people, consistent with achieving strong, sustainable economic growth and fiscal settings.
The Treasury has offices in Canberra, Sydney, Melbourne and Perth. It has been increasing its 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. The 2021 Census will provide detailed regional data for all very small areas on the main demographics.
As at 31 December 2020, the Treasury Portfolio employed 26,776 staff under the Public Service Act 1999. Of this total, 10,390 staff (39 per cent) are employed in Canberra, central Melbourne and central Sydney, 13,633 staff (51 per cent) in other capital cities and 2,753 staff (10 per cent) in regional areas. The 2021 Census will recruit some 20,000 field staff to assist in field collection and some 5,000 (25 per cent) will be in regional areas.
Further details are provided in the Treasury Portfolio Budget Statements.
Family Home Guarantee
The Australian Government is establishing the Family Home Guarantee to assist up to 10,000 single parents with dependants (predominantly women) over four years from 1 July 2021, including those in regional Australia, to enter or re-enter the housing market sooner with a deposit of as little as 2 per cent. Consistent with the First Home Loan Deposit Scheme, the Family Home Guarantee will be available through participating lenders, with geographic reach across Australia.
First Home Loan Deposit Scheme – extension – New Home Guarantee
The Australian Government is building on the success of the First Home Loan Deposit Scheme and the first tranche of 10,000 New Home Guarantees announced in the 2020‑21 Budget by introducing an additional 10,000 New Home Guarantees in 2021–22. This will allow more 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.
The First Home Loan Deposit Scheme and the New Home Guarantee program have broad geographical reach. Regional Australia is well represented, with the Scheme attracting strong interest from first home buyers in outer metropolitan and regional areas. Within the first six months of the First Home Loan Deposit Scheme commencing on 1 January 2020, almost 40 per cent of first home buyers purchased a home in a regional area.
Northern Australia insurance access and affordability package – Establishment of a cyclone and related flooding reinsurance pool
The Australian Government has announced it intends to establish a reinsurance pool for cyclones and related flooding, backed by a $10 billion Government guarantee, to improve insurance accessibility and affordability for properties in areas subject to high cyclone risk. The Treasury will receive $2.4 million in 2021-22 to establish a taskforce that will develop and consult with industry on the final design of the pool, with establishment expected from 1 July 2022.
The reinsurance pool would lower insurance premiums by lowering the cost of reinsurance, which can make up a significant component of premiums for policies with high cyclone and related flood risk. Eligible policies would include home building, home contents, residential and mixed use strata, and select small business property insurance policies.
While the reinsurance pool would cover cyclone and related flooding policies across Australia, its benefits will be most pronounced for areas that face the greatest risk of cyclone and related flood damage, which are predominantly located in coastal areas of northern Australia.
Northern Australia insurance access and affordability package – North Queensland Strata Title Resilience Pilot Program
The Australian Government has announced $40 million in funding for the North Queensland Strata Title Resilience Pilot Program. This is a capped, three-year pilot program to subsidise the cost of cyclone risk mitigation works for eligible strata title properties (residential and mixed use residential) in North Queensland.
The Government will seek to enter into an agreement with the Queensland Government on the delivery of the program, with the aim of sustainably improving insurance access and affordability for strata title properties in North Queensland by improving their cyclone resilience. Implementation of the pilot program is expected to commence from January 2022. Further details will be announced prior to the commencement of the program.
2021 Storms and Floods – tax treatment of qualifying grants
The Government will provide an income tax exemption for qualifying grants made to primary producers and small businesses affected by the storms and floods in Australia.
Qualifying grants are Category D grants provided under the Disaster Recovery Funding Arrangements 2018, where those grants relate to the storms and floods in Australia that occurred due to rainfall events between 19 February 2021 and 31 March 2021. These include small business recovery grants of up to $50,000 and primary producer recovery grants of up to $75,000. The grants will be made non-assessable non-exempt income for tax purposes.
Aligning the Excise Refund Scheme for brewers and distillers with the producer rebate for wine producers
The Government is increasing the available support to brewers and distillers by aligning the benefit available under the Excise Refund Scheme for alcohol manufacturers (the Scheme) with the Wine Equalisation Tax Producer Rebate.
From 1 July 2021, eligible brewers and distillers will be able to receive a full remission (up from 60 per cent) of any excise they pay, up to a cap of $350,000 (increased from $100,000).
The changes to the Scheme will: provide additional support to small distillers and brewers affected by COVID-19; assist the growth of Australia’s craft brewing and distilling industry; and reduce inconsistencies in support arrangements for alcohol producers.
The increased generosity of the Scheme builds on the 2020‑21 MYEFO measure titled Alcohol Taxation – automatic remission of excise duty for alcohol manufacturers which introduced an automatic remission of alcohol manufacturers’ excise refund entitlements. Together, the 2020-21 MYEFO measure and the Budget proposal will reduce participants’ administrative burden associated with the Scheme and increase the financial benefit they are entitled to receive.
Of the approximately 600 brewers and 400 distillers in Australia currently, around two‑thirds operate outside major cities. Additional support to largely regionally based distillers and brewers across the country will serve as much-needed relief for those severely impacted by COVID‑19 and will assist in growing and developing Australia’s alcohol manufacturing sector.
The Government announced HomeBuilder on 4 June 2020 to support jobs in the residential construction sector, including in regional Australia, by providing eligible owner-occupiers with a grant to help towards building a new home or substantially rebuilding an existing home.
As part of the 4 June 2020 announcement, a $25,000 grant was made available for eligible contracts signed on or after 4 June 2020, and up to and including 31 December 2020. On 29 November 2020 the Government announced it would extend HomeBuilder by providing a $15,000 grant for eligible contracts signed on or after 1 January 2021 until 31 March 2021 (inclusive).
Applications for HomeBuilder closed on 14 April 2021. On 17 April 2021, the Government announced that it would invest an additional $774.8 million to extend the construction commencement timeframe from six months to 18 months for all applicants, bringing the total cost of the program to around $2.7 billion.
Extending the construction commencement requirement ensures that those who had entered into eligible contracts by 31 March 2021 and submitted their applications by 14 April 2021 are still able to access the grant, including those living and working in regional Australia. Applicants have until 30 April 2023 to lodge all supporting documentation in support of their application.
JobMaker Plan – temporary full expensing and temporary loss carry back to support cash flow
Temporary full expensing
The Government has introduced a time limited investment incentive that allows eligible businesses to fully expense the cost of eligible depreciating assets. This lowers the after-tax cost of business investment and encourages businesses to bring forward, rather than delay, capital expenditure.
To be eligible for temporary full expensing, businesses must:
- Have an aggregate annual turnover of less than $5 billion, or be a corporate tax entity that meets the alternative income test requirements, and
- Purchase eligible depreciating assets from 7:30pm (AEDT) on 6 October 2020 and first use or install the assets by 30 June 2022. The cost of improvements to existing eligible depreciable assets made during this period can also be deducted in full, as long as those improvements are first used or installed by 30 June 2022.
Businesses with an aggregate annual turnover of less than $50 million may also fully expense the purchase of eligible second-hand depreciating assets.
Temporary loss carry back
The Government also introduced a time limited cash flow support measure that allows businesses with turnover less than $5 billion to apply tax losses to offset previously tax profits, generating a tax refund in the loss year.
Loss carry back complements full expensing in supporting cash flow and encourages eligible companies, including in regional areas, to invest by providing them with earlier access to refundable tax offsets generated by full expensing deductions.
To be eligible to carry back, the company must satisfy several conditions, including:
- Having an aggregated turnover less than $5 billion;
- Incurring a tax loss in the 2019-20, 2020-21 or 2021-22 income year; and
- Having sufficient franking credits so as not to generate a franking account deficit.
Temporary full expensing and loss carry back both formed part of the JobMaker Plan announced as part of the 2020-21 Budget.
JobMaker Hiring Credit
The Australian Government will continue to support both businesses and young job seekers through the JobMaker Hiring Credit, including those in regional areas. The JobMaker Hiring Credit will support growth in employment during the recovery by giving businesses incentives to take on young job seekers.
The Hiring Credit scheme began on 7 October 2020 and employers can continue to hire new eligible employees and join the scheme at any time until 6 October 2021, with support under the scheme continuing until October 2022. 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, for 12 months, provided they continue to meet all the eligibility requirements.
This will help unemployed young people in regional areas access job opportunities and rebuild their connection to the labour force as the economy recovers.