JobKeeper extension welcome, October budget opportunity for tax reform

SYDNEY, 23 July 2020:

Of the announcement today of the Economic and Fiscal Update, The Tax Institute’s Director of Tax Policy and Technical, Andrew Mills (CTA-Life), says:

Extension of JobKeeper

“The Tax Institute welcomes the extension of JobKeeper for another 6 months through to March 2021 as announced earlier this week. The gradual unwinding of JobKeeper ensures many businesses who need the continuing support are no longer facing a financial cliff at the end of September.”

“As it turns out, the total cost of the JobKeeper program as extended until March 2021 is $85.7 billion. This leaves around $45 billion from the original $130 billion cost estimate for the program from March 2020 at the Government’s disposal., It is too early to say whether JobKeeper should be further extended beyond March 2021, but we are in very unpredictable times. It is good to know there is still a significant amount of money in reserve for a further extension of JobKeeper, if one is needed in the future.”

Budget matters

“The forecast $85.8 billion budget deficit announced by the Treasurer today is not unexpected. With no other tax changes announced today the Australian tax policy settings remain unchanged, for now.”

Future tax reform

“We hope the October 6 budget will not be a missed opportunity for tax reform, or to make permanent certain measures, such as the instant asset write-off. The Government clearly supports this measure, given it has already been extended five times. Today could have been an opportunity to provide business with this further support on a permanent basis as well as an opportunity to have brought forward the already legislated tax cuts to encourage consumer spending.”

“We must not make the mistake of putting a band aid on a terminally ill patient. Prolonging what are essentially emergency measures won’t make up for a lack of meaningful tax reform.”

“The silver lining of a once in a century pandemic may be that it presents an opportunity to make once in a century changes to our tax system.”

ENDS

For more information, please contact:

Kelly Emmerton – Media Contact, The Tax Institute 

02 8223 0029 kellyemmerton@taxinstitute.com.au 

 

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