When Treasurer Jim Chalmers delivers the Labor government’s third budget tonight, business owners around the country will be watching keenly for measures that will help them combat persistent inflation, find the staff they need, and invest in growing their business.
It’s now commonplace for governments to announce key budget policies in the weeks and days before the big event, and we already know cost of living relief and the government’s Future Made in Australia plan will take centre stage in this budget.
Here’s everything we know so far.
Chalmers is expected to outline a consecutive surplus when he delivers his budget speech tonight. We now know the government is expecting the surplus to come in at around $9.1 billion for the 2023-24 financial year, with the government saying it has saved almost all of the higher-than-expected revenue it received in 2023-24.
However, the budget is expected to forecast larger deficits for the next four years than what was suggested six months ago, due to increased government spending.
The tax system will be tweaked to encourage investment in priority industries, according to Treasurer Jim Chalmers.
Speaking to the ABC last week, Chalmers said the budget will have an “emphasis on tax reform that will incentivise the kind of investment that we want to see in the future of our economy and in a Future Made in Australia“.
Prime Minister Anthony Albanese says the government’s Future Made in Australia plan will double down on the nation’s unique advantages, particularly in clean energy and critical mineral extraction.
Without hinting at anything as significant as a change to company tax rates, Chalmers said the government will pursue “modest but meaningful” tax tweaks to pursue that future.
At the same time, an overhaul of the rules around foreign investment in Australia will allow for low-risk deals to be fast-tracked.
The government has already revealed a number of investments that will be made under the banner of its Future Made in Australia plan.
These include:
To bolster the ranks of Australia’s construction workforce, the budget will provide 20,000 new fee-free TAFE, VET, and pre-apprentice courses related to the housing sector.
The package will also include $1.8 million to help fast-track the assessment of potential migrants, who may have relevant construction-related qualifications.
Staying on skills and training, the government has pledged to expand its ‘new energy’ apprenticeship scheme to encourage greater uptake.
The New Energy Apprenticeships Program was announced in the October 2022 federal budget and promised financial support to new apprentices in priority occupations. It officially launched on January 1, 2023, and promised to deliver 10,000 apprentices in fields critical to clean energy generation, transmission, and usage.
However, earlier this month, the government revealed the scheme has attracted only 2,210 sign-ups to date, and as such, it will be adjusted from June 1, 2024.
A clean energy component will remain essential to each apprenticeship, however, recipients will not need to focus solely on clean energy. This means apprenticeships linked to housing, advanced manufacturing, and the electric vehicle sector will now be eligible.
Among the infrastructure spending promises to be included in this year’s budget are:
The government says it is hoping to find $1 billion in savings in the budget by further reducing the amount it spends on consultants and external contractors. This is part of an ongoing ‘contractor crackdown’, reports The Mandarin, which has seen the government previously bank $3 billion in savings.
The 2024-25 budget paper will include a $519.1 million funding boost for the government’s Future Drought Fund, which will be directed towards helping farmers and regional communities prepare for dry conditions and become more climate resilient.
Adding superannuation to government-funded parental leave is another budget that has already been outlined by the government. Families will receive 12% superannuation on their 20 weeks of parental leave from July 2025.
A late pre-budget announcement revealed that the $20,000 instant asset write-off scheme will be extended to June 2025. If this feels familiar, that’s because this is exactly what happened in last year’s federal budget. However, it’s worth noting the legislation surrounding the extension hasn’t passed parliament.
This was welcome news to the business community, as there was a possibility of the threshold plummeting back to just $1,000.
However, some feel that the threshold should be increased further, with the Council of Small Business Organisations Australia (COSBOA) calling for it to be raised to $150,000.
Victor Dominello may be out of office, but his digital transformation legacy lives on. About $288.1 million over four years has been earmarked for the government’s Digital ID scheme. The Albanese government got this past the senate back in March.
The point of this is to reduce the personal information held by businesses — something that has become an increasing concern due to the significant uptick in data breaches in recent years.
It’s worth noting that even after the Act passes and begins rolling out, the uptake will be on the slower side. Australia Post, banks and credit card operators will be among the first to utilise the system.
Finance Minister Katy Gallagher confirmed in March that accredited private businesses will be able to apply to the Digital ID System within two years of the rollout.
The government has made clear its plans to change the Stage 3 tax cuts that are due to come into effect on July 1 this year, but we can expect to hear more about these changes in the budget papers.
To recap, Labor is proposing to rework the reforms in favour of people on lower income receiving higher tax cuts, while also reducing the tax benefit that would have flowed to those in the highest income brackets.
Energy bill rebates were pivotal to last year’s federal budget, which saw the federal government contribute $1.5 billion in support to households and small businesses. With power prices still stretching budgets at home and in the workplace, the 2024-2025 budget may see further support.
“Helping Australian families and small family businesses with their energy bills was a key priority in last year’s budget,” Albanese told the Council of Small Business Organisations Australia summit last month.
“And as we put together next month’s budget, small businesses and families will again be front and centre in our thinking.”
A major review into the franchising system recently recommended the federal government consider moving to a licensing model. The government has agreed to that recommendation and said it will form a Treasury taskforce to investigate if the Franchising Code of Conduct should be reformed. So don’t be surprised to see a Treasury line item underpinning that taskforce in Tuesday’s budget.
To see SmartCompany‘s full budget coverage, click here.
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