Last week’s Federal Budget has allocated $257 billion of measures to combat the Coronavirus-fuelled recession and position Australia’s business community to lead the economic recovery.

Treasurer Josh Frydenberg (pictured) said the government’s Economic Recovery Plan for Australia will create jobs, rebuild our economy and secure Australia’s future.

He said the 2020-21 Budget commits a further $98 billion including, $25 billion in direct COVID-19 response measures and $74 billion in new measures to create jobs.

“Under our plan, the economy is forecast to grow by 4¼ per cent next calendar year and unemployment is expected to fall to 6½ per cent by the June quarter 2022,” he said.

The Treasurer said the budget highlights included:

• Supporting nearly half a million young Australians with a new JobMaker hiring credit
• Investing a record amount in skills and training to make sure Australians have the skills they need to get a job
• Supporting our manufacturing industry to build our sovereign capability and help create jobs
• Incentivising business to invest in their business, creating more economic activity and more jobs
• Providing tax relief for more than 11 million hard working Australians, to put more money in their pockets to spend in small businesses across the country and help create jobs
• Investing more in infrastructure now to create more jobs

Minister for Resources, Water and Northern Australia Keith Pitt (pictured) praised the more than $4 billion investment in northern Australia, highlighting it would capitalise on the north’s advantages in gas, critical minerals and renewable energy sources.

He said Northern Australia is at the forefront of the gas-led recovery with $52.9 million invested for Strategic Basin Plans for the Beetaloo and North Bowen and Galilee; independent scientific research into the social, economic and environmental impacts of gas; and support for emissions reduction through carbon capture.

“Gas will play a critical role in the nation’s economic recovery, to capture new opportunities in global resources markets and position Australia to bounce back stronger,” Minister Pitt said.

Unravelling the budget

Australian Resources and Energy Group AREEA has provided the below snapshot of the key measures for Australia’s resources and energy employers.

Business Investment

The enormous business investment incentives were arguably last night’s headline announcement.

The Australian Government is providing businesses with a turnover of up to $5 billion the ability to immediately write-off the full value of any eligible asset purchased for the business until June 2022.

In addition, losses incurred to June 2022 can be offset against profits made in or after the 2018-2019 financial year.

The government forecasts these measures will create an additional 50,000 jobs across the country.

Job Creation

A second significant announcement was the creation of a new ‘JobMaker’ hiring credit, funded at $4b over three years, to encourage businesses to hire younger Australians.

The scheme will see employers who hire an individual aged 16-35 on the ‘JobSeeker’ payment scheme provided with a weekly wage subsidy for that employee for up to 12 months.

Payments will be $200 per week for those aged under 30 and $100 per week for those aged between 30-35.

Special conditions / criteria apply. Visit this government Fact Sheet.

Skills and Training

The record investment in upskilling and reskilling includes:

• $1.2b to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses for employ them.
• $1b ‘JobTrainer’ fund to create up to 340,000 free or low-cost training places for school leavers and job seekers.
• New cadetships and apprenticeships for women in STEM occupations.
• $75.9m over four years from 2020-21 in additional resourcing to support implementation of the Skills Reform Package.
• $1.7m over four years from 2020-21 for the development of a National Skills Priority List for Apprenticeships to replace the current three lists with a single list based on a skills shortage methodology.

Manufacturing Plan

The ‘Modern Manufacturing Plan’ involves $1.6b of funding support into six priority industries, including resources technology and critical minerals processing.

The initiative intends to make Australian manufacturers more globally competitive through cheaper and more reliable energy, better skills and training, lower taxes and less red tape.

Workplace Relations

Workplace relations had a minor role in last night’s Budget, with notable announcements being:

• $5.1 million in additional funding to the Fair Work Commission.
• $46.3m over three years for the Fair Work Ombudsman to enhance its advice and education support to businesses.
• $35.3m over two years to fund additional demands on the Fair Entitlements Guarantee program.
• $2.1m over three years to establish a Respect@Work Council to assist in addressing sexual harassment in Australian workplaces
• $90.3m over three years from for concessional work test arrangements for Paid Parental Leave in response to COVID-19.

AREEA notes the Attorney-General is expected to introduce legislation to the Parliament prior to the end of the year, giving effect to industrial relations reforms discussed during the recent “IR Working Groups” which AREEA was heavily involved in.

Migration

While the government will maintain the 2020-21 Migration Program planning level at 160,000, the Family Stream will see a one-off increase to 77,300 (from 47,732).

In the Skilled Stream, priorities will be employer-sponsored, global talent, business innovation and investment programs.

Included is $29.8m over two years from 2020-21 for the JobMaker Plan to establish a new whole-of-government Global Business and Talent Attraction Taskforce to attract international businesses and exceptional talent to Australia.

Other

• $317m for Australian exporters to continue to access global supply chains, building on the 80,000 tonnes of exports we have already helped get to market.
• $1.9b in new funding to support low emissions and renewable technologies.
• $62.8m to expand the Local Jobs Program seeking to assist 900,000 job seekers across 25 regions.
• $35.8m to ensure employment services providers can provide job seekers with necessary support.

AREEA’s policy specialists are on-hand, ready to assist our members with additional detail or explanation of Federal Budget measures, outlined above or otherwise. Please email [email protected] in the first instance.