The Federal Budget has put faith in a business-led pandemic recovery, offering a suite of incentives that reward “aspiration and enterprise”.
The Budget introduces tax incentives for small businesses, skills development and technology, while responding to inflationary pressures, higher global fuel prices and skills shortages.
In a “Budget for uncertain times,” our national finances have significantly improved, spurred by Australia’s stronger-than-predicted recovery from the COVID recession, and low unemployment.
With unemployment set to fall as low as 3.75 per cent, the Budget confirms expectations that the skills squeeze will remain tight for coming years. However, a booming economy and GDP growth that outpaces major developed nations ensures WA is well-positioned to take advantage of the opportunities ahead.
Here’s what the Federal Budget means for WA businesses.
Boosting skills with apprentices, trainees
The Budget earmarks billions in funding to increase apprenticeships, including to extend the successful Boosting Apprenticeship Commencements and Completing Apprenticeship Commencements programs for a further three months until June 30, 2022.
A new streamlined Australian Apprenticeships Incentive System is aimed at developing apprentices in priority trades.
The Government has also allocated funding for an extra 800,000 training places, while small businesses will receive a bonus 20 per cent deduction for the cost of external training courses from now until June 30, 2024.
Workforce participation incentives
The Budget commits $346.1m over five years to reform the Paid Parental Leave system to allow working parents to decide how they share 20 weeks of leave. This will benefit thousands of parents, and enable more women to participate in the workforce.
$19.4m has also been added to the existing Community Child Care Fund to establish up to 20 childcare services in regional and remote areas.
Measures for SMEs
The GDP ‘uplift’ for PAYG instalments will be reduced from 10 per cent to 2 per cent, reducing businesses’ quarterly tax bill. It also flags several tax related red-tape reduction initiatives that will reduce compliance costs for businesses across a range of sectors.
A bonus 20 per cent deduction will apply from now until June 30, 2023, for expenses and assets that support technologies such as cloud computing, e-invoicing, cybersecurity and web design.
The Budget includes funding for a new patent box for low emissions technology and agriculture, with taxes applied at almost half the corporate rate.
The Government has also outlined procurement reform, with major projects split into smaller components, which will help SMEs compete against larger bidders.
Industry and infrastructure funding
The Budget confirms $328.3m in additional funding for the Modern Manufacturing strategy, including $53.9m to enable small to medium manufacturers to innovate and adopt new technologies. There is also $250.5m to help early-stage Australian critical minerals projects reach market readiness.
Key infrastructure projects include $4.3b for a large vessel dry dock at Henderson, $1.5b to boost low emissions production in the Pilbara, and $1.7b on WA road and rail projects.
There is also $1.3b for improving regional mobile telecommunications and NBN Co’s fixed wireless network nationally.
There is $468.3m to implement the Government’s response to the Royal Commission, and $458.1m to manage the impacts of COVID-19. This includes $215.3m over two years to provide staff retention bonuses of up to $800.
$49.5m has been set aside to provide an additional 15,000 low and fee-free training places for existing and new entrants to the sector.
While these measures are welcome, they are unlikely to be sufficient to address the crippling workforce shortages the sector is facing, with no funding in the budget to enable providers to increase wages.
CCIWA Breakfast with The Federal Treasurer
You can hear from Federal Treasurer Josh Frydenberg in his only post-Budget speech in Western Australia at CCIWA’s exclusive Business Breakfast on April 5.
CCIWA Federal Budget Breakdown
Watch Aaron Morey present expert insights on the Budget and what it means for WA’s business community and economy in this 1 hour webinar.