9th May, 2023
Tonight, the Federal Government released its annual Budget for 2023-2024.
The Budget states its aim as providing “stronger foundations for a better future,” and lists several key initiatives for enterprise size businesses to lay ‘foundations for a stronger and more secure economy.’
The Government has outlined its vision to make Australia a renewable energy superpower, supporting this by investing heavily in strategic industries and in people and their skills.
The Powering Forward the Regions Fund is a program that aims to support regional communities to access reliable, affordable and secure energy.
The fund is part of the Government’s broader plan to improve energy security and affordability in regional areas and is designed to help communities take advantage of the economic opportunities that arise from the transition to a low-emissions energy system.
The Government has also allocated an additional $1.3billion over five years to support local manufacturing solutions, including the establishment of the Clean Energy Industries Stream to support the sovereign manufacturing capability of industries that produce inputs (primary steel production, cement and lime, alumina and aluminum) that are essential to the development of Australia’s clean energy industries.
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The government has also emphasised the importance of developing and supporting critical technologies such as artificial intelligence, quantum computing, cybersecurity, and space technology.
This budget provides $116 million to support the development of critical technologies in Australia over the next five years, and $101.2 million over the same timeframe, to support businesses to integrate quantum and artificial intelligence (AI) technologies into their operations, including supporting businesses’ adoption of AI technologies to improve processes and increase trade competitiveness.
For those in the construction industry, the Government has announced an increase in the rate for the capital works tax deduction for Build to Rent (BTR) properties from 2.5–4 per cent per year.
This initiative allows the property owner to claim tax deductions on the capital expenses, such as the cost of construction, renovating or structural improvements for residential properties.
In addition, the Government will reduce the final withholding tax rate on eligible fund payments from managed investment trust (MIT) investments, which include investments generated from passive income activities including property or fixed interest assets, from 30 per cent to 15 per cent.
This means that investors who receive eligible fund payments from a MIT investment will have less tax withheld at the time the payment is made, resulting in a higher after-tax return on their investment.
When it comes to the workforce, the Government has announced several incentives to address unemployment rates, invest in the skills needed to drive future economic growth and to tackle the skill shortages affecting almost all industries across the country.
With at least 70,000 fewer people doing an apprenticeship or traineeship than there were 10 years ago, the Government has introduced their Skills Guarantee.
This commitment aims to ensure one in 10 workers on major, federally funded government projects is an apprentice, trainee or paid cadet.
From 1 July 2024, projects with contracts valued at $10million or more in the construction and information and communications technology sectors and will include these targets, as well as sub targets relating to female employment.
For apprenticeships, additional funding of $54.3million has been allocated over the next 5 years to introduce a new non-financial support model for Australian Apprenticeships
Grant funding of $5 million over the three-year period from 2024–25 will be provided to organisations with appropriate expertise in supporting women in the workplace, to further support women in historically male dominated trade apprenticeships.
The new model will also provide support to women who commence their non-traditional trade apprenticeships prior to 1 July 2024 during their transition to new service arrangements.
The Australian Foundation Skills Program (AFSP) is a government-funded program aimed at improving the language, literacy, and numeracy skills of adult learners in Australia.
The program has received a $12.9million cash injection, which is to be spent on redesigning the program, and improving access to training for all Australians seeking to develop their language, literacy, numeracy, and digital skills.
This will also include a specific focus on First Nations people with place-based, whole of community projects designed to meet community language, literacy, numeracy, and digital needs, and delivered through First Nations organisations in partnership with TAFEs and other Registered Training Organisations, or Adult and Community Education sector providers.
To increase the financial incentive for pensioners and veterans looking to re-enter the work force, a six-month extension and $3.7 million of funding has been announced to provide age and veterans pensioners a once-off credit of $4,000 when returning to the workforce and to increase the amount pensioners can earn — up to $11,800 — before their pension is reduced.
To further address employee shortages, the Budget opens up the migration stream, including for skilled migration, to provide some skills relief.
For the 2023–24 permanent Migration Program, the Government will return the planning level to the longer-term level of 190,000 places and will allocate 137,100 places (around 70 per cent) to the Skill stream, helping address Australia’s longer term skill needs.
The Government will also make it easier for Temporary Skill Shortage (TSS) (subclass 482) visa holders, including on the short-term stream, to obtain permanency, giving longer-term access to skilled migrants.
The limit of one onshore renewal for the short-term stream TSS visa will also be removed.
In addition, a new, direct pathway to Australian citizenship for New Zealand citizens in Australia will be in force from 1 July 2023, enabling those residents in Australia to apply for citizenship, without becoming a permanent resident first.
This Budget is a clear indication that the government recognises the important role that enterprise businesses play in the Australian economy, and the issues that these businesses are facing when it comes to managing their technological advancements, manufacturing capabilities and workforce shortages.
For more Federal Budget coverage, click here.