Economic and Fiscal Update – July 2020
The Treasurer has released the Economic and Fiscal Update – July 2020 on 23 July 2020.
The majority of tax and superannuation measures announced in the update have previously been announced or implemented. The tax, superannuation and employer support measures not previously announced are listed below.
Measures in response to COVID-19
Application period extended for temporary early access to superannuation
The government has allowed individuals affected by the financial impacts of COVID-19 to access up to $10,000 of their superannuation in the 2019/20 income year and a further $10,000 in the 2020/21 income year on a tax-free basis.
The application period for the 2020/21 income year will be extended from 24 September 2020 to 31 December 2020.
COVID-19 SME Guarantee Scheme extended
The Coronavirus SME Guarantee Scheme to assist small and medium enterprises (SMEs) impacted by the coronavirus to access working capital will be extended to loans written until 30 June 2021.
Under the Scheme, the government will provide a guarantee of 50% on new loans issued by eligible lenders to SMEs. Targeted amendments will also be made to ensure loans available suit the evolving needs of SMEs.
The Scheme was previously due to end on 30 September 2020.
Apprentice and trainee wage subsidy expanded
The Supporting Apprentices and Trainees wage subsidy established to support continuity of training will be expanded. The initial wage subsidy provided small business employers with 50% of an apprentice or trainee’s wages for 9 months, capped at $7,000 per quarter.
The subsidy, due to end on 30 September 2020, will be extended for a further 6 months to 31 March 2021 and will be expanded to include medium-sized businesses from 1 July 2020.
Exemption of pay and allowances for Operation Orenda
The government will also provide a full income tax exemption for the pay and allowances of Australian Defence Force personnel deployed on Operation Orenda, with effect from 1 April 2020. The Income Tax Assessment (1936 Act) Amendment (Operation Orenda Eligible Duty) Regulations 2020 (F2020L00943) has been registered to implement the exemption.
Lost and unclaimed superannuation
In the 2015 Federal Budget, the government announced measures to allow the ATO to pay lost and unclaimed superannuation amounts directly to New Zealand KiwiSaver accounts.
The start date for this measure has been revised from 1 July 2016 to six months after the date of royal asset of the enabling legislation.
Facilitating closure of eligible rollover funds
In the 2019/20 Mid-Year Economic and Fiscal Outlook, the government announced measures to facilitate closure of eligible rollover funds (ERFs).
The government will amend the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 (currently before the Senate) to:
- defer by 12 months the start date of the measure that prevents superannuation funds transferring new amounts to ERFs
- defer the date by which ERFs are required to transfer accounts below $6,000 to the ATO to 30 June 2021
- defer the date by which ERFs are required to transfer remaining accounts to the ATO to 21 January 2022