THE HON JOSH FRYDENBERG MP
28 December 2020
REBUILDING AND REFORMING IN A YEAR LIKE NO OTHER
The Morrison Government has this year passed major pieces of legislation to cushion the blow of the COVID-19 pandemic, keeping Australians in jobs, businesses in business and sparking a faster-than-anticipated economic recovery.
Despite 2020’s challenges, the Government has also successfully delivered on its promises to cut red tape and improve Australia’s economic competitiveness, with reforms to the tax system, insolvency, financial services and foreign investment.
In total, the Government passed more than 40 pieces of legislation in 2020 from the Treasury Portfolio, including:
A key feature of the Government’s Economic Recovery Plan is the temporary JobKeeper Payment which has been an economic lifeline to millions of Australians, helping to keep businesses in business and Australians in jobs.
Announced in March, legislated in April and extended in September, the JobKeeper Payment provided a critical economic lifeline for Australian businesses and their employees at the height of the pandemic.
The first phase of JobKeeper supported more than 3.6 million workers and around 1 million businesses, with payments totalling nearly $70 billion in the six months to the end of September.
RBA analysis released in November indicated that JobKeeper has saved at least 700,000 jobs.
Cash Flow Boost
The Government’s economic response also provided direct cash flow support to small and medium businesses and not-for-profit entities to keep operating, pay their bills and retain staff.
The Boosting Cash Flow for Employers measure was announced and legislated in March, with the first payments beginning in April.
In total, this measure is expected to provide around 800,000 small business and not-for-profit entities with support totalling around $35.5 billion.
The cash flow boost has offered vital support to businesses and not-for-profit entities weathering the COVID-19 crisis, ensuring they recover strongly and continue to grow.
JobMaker Hiring Credit
Unveiled in October’s Federal Budget, the $4 billion JobMaker Hiring Credit is helping younger Australians, hit particularly hard by the pandemic, get back to work.
Parliament passed legislation in November, securing fixed payments of $200 per week for an eligible employee aged 16 to 29 years and $100 per week for an eligible employee aged 30 to 35 years, paid quarterly in arrears by the Australian Taxation Office.
The JobMaker Hiring Credit is expected to support around 450,000 positions for young Australians.
Following the Federal Budget in October, the Government secured the passage of legislation through Parliament to deliver tax cuts for more than 11 million Australians, backdated to 1 July this year.
By bringing forward Stage two of the Personal Income Tax Plan and providing the additional low and middle income tax offset, hard working Australians will have more money in their pockets at a time when they need it most.
The legislation also recognises the importance of businesses in the economic recovery, by allowing those with a turnover of up to $5 billion to immediately deduct the full cost of eligible depreciable assets as long as they are first used or installed by 30 June 2022.
In order to help businesses dealing with the economic impact of COVID-19, the Government successfully passed legislation to enact the most important changes to Australia’s insolvency framework in 30 years.
The reforms introduce a new, simplified debt restructuring process, drawing on key features of the Chapter 11 bankruptcy model in the United States. They will apply to incorporated businesses with liabilities of less than $1 million – covering around 76 per cent of businesses subject to insolvencies today, 98 per cent of whom who have less than 20 employees.
The measures take effect on 1 January 2021, reducing costs, cutting red tape and ultimately helping more small businesses to recover from the COVID-19 crisis.
Foreign Investment Framework
In December, the Government passed legislation giving effect to the most significant reforms to the Foreign Acquisitions and Takeovers Act 1975 in nearly 50 years.
This ensures Australia’s foreign investment framework keeps pace with emerging risks and global developments, including similar changes to foreign investment regimes in comparable countries.
Responding to the Hayne Royal Commission
The Government continues to bolster protections for consumers and small businesses as part of its response to the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
In December, Parliament passed legislation addressing 20 recommendations, strengthening unsolicited selling (anti-hawking) provisions and preventing pressure selling, introducing a deferred sales model for add-on insurance products and making the handling and settlement of insurance claims a ‘financial service’.
These changes are complemented by providing further clarity regarding the role of the regulators and enhancing the requirements of financial institutions reporting breaches of the law which will ensure significant misconduct is reported and investigated sooner.
The Government’s legislative agenda in 2021 will continue to create jobs, rebuild our economy and secure Australia’s future.