Budget night kicks off election campaign

By Gabrielle Stannus
 

In what could be perceived as a Clayton’s election campaign, i.e. the campaign you are having when you are not really having one, the Federal Government announced its Federal Budget two months earlier than usual on Tuesday 29 March 2022. We assess key budget measures targeting biosecurity, employment and training, infrastructure and water security, small business and sustainability and how these may impact your business and the greenlife industry more broadly.

BIOSECURITY

Agriculture and biosecurity

The Federal Government will provide a further $135.6 million over 5 years from 2021-22 to support the agricultural sector’s ambition of a $100 billion industry by 2030 through strengthening biosecurity arrangements and agriculture communities. Funding includes:

• $61.6 million over 4 years from 2022-23 to improve biosecurity capabilities, infrastructure and risk management activities across Northern Australia including addressing the potential threat of lumpy skin disease
• $20.0 million over 4 years from 2021-22 to work with states and territories to reduce the impact of pests and weeds on agricultural production, native wildlife, the environment, and the community .

Comments: Potentially good news. However, the devil is in the detail. How much, if any, of the $61.6 million will be spent on plant protection in Northern Australia, and on what programs? And is $20.0 million over 4 years enough to stop the spread of pest and disease domestically?

EMPLOYMENT & TRAINING

New Apprenticeships incentive system

The Federal Government will invest a further $2.8 billion to support Australian apprenticeships, building on what it claims is $13.3 billion spent on apprenticeships and traineeships since 2013. The Boosting Apprenticeship Commencements (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidies are extended to 30 June 2020 to support the economic recovery. From July 2022, support for employers (wage subsides) and apprentices (training support payments) will transition from BAC and CAC to the new priority focussed apprenticeships incentive system.

Comments: Those occupations listed in the Australian Apprenticeship Priority List will benefit most and nurseries will be pleased to see that ‘Nurseryperson’ is included on this list. So if you are looking to employ an apprentice, now may be the time to do it (depending, of course, on the outcome of the Federal Election and whether the Coalition returns to power)

Creating opportunities for women to fulfill their potential

The Federal Government promises to provide $482.0 million to help women advance their careers and improve their economic security. The 2022-23 Women's Budget Statement includes new measures to support more women into senior roles and leadership positions, with additional funding of $40.4 million for a range of initiatives. This includes expanding the Future Women’s Jobs Academy to provide mentoring support and skills training to help women to transition into management and leadership positions.

Comments: Funding that can help the greenlife industry to attract and retain the brightest female minds is welcomed.

Boosting participation

The Government will provide $153.5 million over 5 years from 2021-22 to address workforce shortages, support job seekers to find employment, and make it easier for vulnerable Australians to participate in the workforce.

• $52.8 million over 5 years from 2021-22 to deliver the new ReBoot initiative and support Workforce Australia to support up to 5,000 disadvantaged young Australians to develop employability skills, providing a pathway to employment services and training opportunities
• $44.6 million over 2 years from 2022-23 to continue support for businesses who employ mature-aged Disability Employment Services program participants through the Restart Wage Subsidy

Comments: Whilst the ReBoot and Restart programs have niche target audiences, they might provide the help your nursery is looking for. ReBoot activities may include hands-on learning and work experience, and connections with industry. Employers may receive $10,000 for hiring mature age workers (50 years and over) through the Restart program.

INFRASTRUCTURE & WATER SECURITY

Infrastructure

The Federal Government is committing an additional $17.9 billion to infrastructure projects across Australia, bringing the total infrastructure pipeline to $120 billion. This investment includes over $500.0 million for the Local Roads and Community Infrastructure Program, supporting local councils to maintain and deliver priority local road and community infrastructure projects across Australia.

Comments: Updating local road infrastructure provides a unique opportunity to plan and deliver more greenlife in our urban and regional areas. No specific mention though is made of green infrastructure as part of this plan at this time.

Regional infrastructure

The Government will invest an additional $7.1 billion in transformational infrastructure to help Australia push into new frontiers of production and growth. This includes funding for four regions of national importance – supercharging development in the Northern Territory, North and Central Queensland, the Pilbara (WA) and the Hunter (NSW) to harness export growth opportunities. Funding will support the development of ports, dams, roads and low emission manufacturing hubs.

Securing Australia's water future

The Federal Government is providing a further $7.4 billion for new and expanded dam projects that increase water security, build drought resilience for the future and promote regional economic development. This includes $6.6 billion for water infrastructure in Queensland to facilitate the development of a new food bowl in Australia's north and unlock new agricultural export opportunities.

Future Drought Fund – Drought Response, Resilience and Preparedness Plan: improving readiness and resilience

The Federal Government will provide an additional $84.5 million over 4 years from 2022-23 (and $10.0 million over 2 years from 2026-27) for activities to improve the drought readiness and resilience of Australian farmers and communities.

Comments: These last three measures may be good news to growers in North and Central Queensland and other parts of Australia seeking water security. Improved road infrastructure in the right places may also help those growers who need to transport perishable plant products across interstate borders quickly and efficiently.

SMALL BUSINESS

Tax cuts

More than $21 billion in tax cuts will be delivered to small businesses from 2015-16 to 2024-25, with around $2.6 billion in 2022-23. This includes reducing the company tax rate for small businesses from 30 per cent in 2013-14 to 25 per cent from 1 July 2021, which the Federal Government claims is the lowest level in 50 years.

Comments: Most small businesses would welcome tax relief after a difficult couple of years’ operation through the COVID pandemic and various regional disasters.

Technology investment boost

Australia’s cloud computing market is expected to grow by 12.5 per cent to reach $US14.1bn in 2025¹, accelerated by demand for teams working in hybrid environments to have access to applications and systems remotely and securely. The Technology Investment Boost will provide businesses with a $120 tax deduction for every $100 spent on digital transformation – for up to $100,000 in a year.

Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of the cost incurred on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services.

An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost.

Comments: Since the COVID pandemic commenced, many greenlife businesses have had to transform the way they do business, shifting from a purely bricks and mortar presence to a digital environment. But there is still much more that many nurseries can do to increase their sales and reach online. So this should be welcome news to those small businesses seeking to adopt online technology.

Skills and training boost

Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online and delivered by entities registered in Australia. Some exclusions will apply, such as for in-house or on-the-job training and expenditure on external training courses for persons other than employees.

Comments: Want to retain and/or upskill your employees? This skills and training boost may provide benefit to your small business.

SUSTAINABILITY

Building Australia’s circular waste economy

The Federal Government will provide $83.1 million over 5 years from 2022-23 to support the transformation of Australia’s waste and recycling sector and expedite Australia’s transition to a more circular waste economy. Funding includes:

• $60.4 million over 4 years from 2022-23 to boost Australia’s plastics recycling capabilities through state-of-the-art technologies and advanced recycling solutions for problematic plastics under the Recycling Modernisation Fund
• $18.2 million over 5 years from 2021-22 to develop and promote a ‘ReMade in Australia’ brand and certification scheme that supports Australians to buy quality, locally recycled products

Comments: The greenlife industry is already leading the way in the recycling of polypropylene. However, to truly close the loop we must work with businesses to encourage consumers to buy locally recycled products.

OTHER

Temporary fuel excise relief

The Federal Government will reduce fuel excise by 50 per cent for 6 months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.

Comments: All of us will appreciate that extra money back in our pockets. However, longer term investment in electric vehicle infrastructure will drive (pardon the pun!) the transformative change we need to reduce our addiction to fossil fuels and avert dangerous climate change.

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Right of reply – Labor’s response

On Budget Night, Opposition Leader Anthony Albanese outlined the following commitments to Australians in his budget reply through which he hopes to end what he called “the climate wars” and transform Australia into a “renewable energy superpower”².

• Powering Australia plan to drive investment in cheap, renewable energy with 604,000 new jobs created by 2030, with five out of every six in the regions, and lower power bills for households and businesses alike.
• Plans for a Future Made in Australia – making more things here, diversifying the economy and revitalising the regions. Using its National Reconstruction Fund to work with business to help turn good ideas into good, secure jobs and new homegrown industries.
• Plans to invest in infrastructure, because roads, rail, ports, and high-speed broadband as part of the building blocks of a stronger, more connected, more efficient economy.
• Plans for secure work and more opportunities for training with more university places and 465,000 fee-free TAFE places, and the creation of Jobs and Skills Australia
• Cheaper child care because it is good for productivity, workforce participation, and economic growth

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But wait, there is more!

Well we cannot promise you that just yet! And neither can the Coalition promise those measures outlined above with the results of the Federal Election now scheduled for Saturday 21 May 2022 still unknown. We are sure though that we will be hearing plenty more from the Coalition, Labor and the Greens as they continue their election campaigning. Stay tuned as we continue to unpack their policy promises to determine what they might mean for your business and the greenlife industry more broadly.

Further reading

Federal Budget: https://budget.gov.au/

(References)

1. Lea, Helen 2022, 'Making the most of the digital tech tax break for business: Budget 2022', Kochie's Business Builders, viewed 13 April 2022, https://www.kochiesbusinessbuilders.com.au/making-the-most-of-the-digital-tech-tax-break-for-business-budget-2022/?utm_source=Kochie%27s+Business+Builders&utm_campaign=c5608184a8-EMAIL_CAMPAIGN_2022_02_21_04_54_COPY_01&utm_medium=email&utm_term=0_3ad9fd1a0f-c5608184a8-109304951&mc_cid=c5608184a8&mc_eid=442e92d242#_ftn1
2. Albanese, Anthony 2022, Budget Reply 2022, Speech, Thursday 31 March 2022, viewed 12 April 2022, https://anthonyalbanese.com.au/media-centre/budget-reply-2022