Is the grass greener over the ditch?
Australia has recently released its 2020-21 Federal Budget where they plan to combat the effect of Covid-19 by investing in infrastructure, job creation, asset write offs and personal tax cuts. Meanwhile in New Zealand, Labour continues their plan to keep New Zealand moving by investing in people, jobs, small businesses, infrastructure and global trade.
Australia’s approach of increasing the low-middle tax bracket thresholds is similar to what National proposed, with eligible Australians receiving tax relief of up to $2,745. These tax cuts are provided to encourage spending and stimulate the economy. Conversely, in New Zealand there will be a new top tax rate effecting 2% of New Zealanders and generating $550 million of annual revenue.
Australia has extended its $150,000 asset write-off deduction until 30 June 2022 for businesses with a turnover of up to $5 billion. In New Zealand our threshold has been increased to $5,000 until 17 March 2021, then $1,000 thereafter.
Both countries have implemented tax loss carry back changes. In Australia small businesses can carry back tax losses from the 2020-2022 tax years to offset previously taxed profits in 2019 or later tax years. All New Zealand businesses expecting to make a loss in the 2020 or 2021 year can use that loss to offset profits they made the year before. The key difference is that in New Zealand tax losses can be carried back one year, while in Australia they can be carried back to any year from 2019.
Additional Australian policies to boost job creation include a job hiring incentive credit where
businesses will receive either $100 or $200 per week for each employee hired depending on their age, and businesses taking on new apprentices or trainees will be eligible for a 50% wage subsidy.
COVID-19 has changed the way we work, travel, communicate and live. From overseas travel being only a memory to having to learn to cook during lockdown there are some interesting by-products of Covid-19.
PPE has become a fashion accessory with many large fashion companies entering the facemask industry to provide luxury facemasks due to the increase in demand, as well as many people channelling their inner fashion designer and taking the DIY route and making their own. The hottest accessory of 2020.
Enforcing social distancing has become creative. From a German café making people wear swimming noodles as hats to a restaurant in the United States designing ‘bumper tables’ which use a large inner tube to keep diners apart.
Artificial intelligence algorithms that look after inventory management, fraud detection and marketing became confused by the sudden and drastic change in behaviour.
And the changes continue with ANZ now not buying or selling foreign currency due to a decrease in demand arising from boarder restrictions.