Budget Review 2021–22 Index
Liz Wakerly
The 2021–22 Budget contained several measures
designed to boost manufacturing, encourage industry and help small businesses.
Some are sector-specific; others relate to regional businesses. Some are new
initiatives; others extend existing programs. A number of measures for industry
and small business are included in the Commonwealth’s
Deregulation Agenda, a continued
COVID-19 response package (focusing on the aviation and tourism sectors), the
Digital Economy
Strategy, and the Women’s Economic Security Package (contained within the Women’s
Budget Statement).
There is a mix of grants, tax incentives, apprenticeship/training
programs and deregulation measures. This article and Table 1 summarise the main
new spending commitments pertinent to industry and small business. Identified
payment commitments total $425.2 million. Reductions in receipts—mostly
attributable to a temporary measure allowing businesses to deduct any eligible
expense immediately (and so reduce taxable income), rather than in the future—reach
more than $18.1 billion.
Some of the sector-wide initiatives, for example under the
Women’s Economic Security Package, and funding for industry-based scholarships
and other training, are explored in the ‘Women’s
safety and economic security’ and ‘Higher
education’
articles in the 2021–22
Budget Review. Support for the energy sector is summarised in the ‘Australia’s
‘gas fired’ recovery: How are we tracking?’ article.
Sector-specific measures
The Australian
Space Agency will receive $13.3 million over four years from 2021–22
(and $3.3 million per year ongoing) to ‘increase its regulatory and
technical advisory capacity’ under the Space (Launches and Returns) Act 2018
and to ‘support the growth of the industry’ (Budget
Measures: Budget Paper No. 2: 2021–22, p. 137). Funding was first
provided for the space industry in the 2018–19
Budget. According to the Minister
for Industry, Science and Technology, Christian Porter:
Space is the new frontier for modern manufacturing and is one
of the Government’s six National Manufacturing Priorities. Roadmaps developed
with industry have recently been released by the Morrison Government to inform
the long-term strategy in each of these priority industries, including space,
and to help capture exciting new opportunities to grow these sectors and create
jobs.
The Australian fashion industry will receive $1 million
over two years from 2020–21 to support the growth of the sector by ‘promoting
demand creation and increased recognition of the innovation and design
capabilities in Australian fashion’ (Budget Paper No. 2, p. 144). The Industry,
Science, Energy and Resources Portfolio Budget Statement (p. 39) notes that
this will go to the Australian
Fashion Council to create a Fashion Certification Trade Mark.
Funding is being provided to the Department
of Industry, Science, Energy and Resources (DISER) (Portfolio Budget
Statements 2021–22: Budget Related Paper No. 1.9: Industry, Science, Energy and
Resources Portfolio, p.24) to work with the Department of Health to develop
an onshore mRNA vaccine manufacturing capability in Australia. Funding is not
for publication (nfp) due to ‘commercial in confidence sensitivities’, but
activities include ‘approaching the Australian market for a long-term sovereign
mRNA manufacturing capability to establish end-to-end onshore capability’ (see
also the ‘Science and Research’ article).
To ‘assist
the growth of Australia’s craft brewing and distilling industry’, from 1 July 2021
eligible brewers and distillers will receive full remission (up from 60%) of
any excise they pay on the alcohol they produce, up to a cap of $350,000 each
financial year (up from $100,000). This measure aligns the benefit under the
existing Excise Refund Scheme for brewers and distillers with the existing Wine
Equalisation Tax Producer Rebate. It is expected to cost the Treasury $225 million
in tax receipts over the forward estimates (Budget Paper No. 2, p. 12).
The automotive
research and development tariff concession has been extended (from 1 April 2021)
until 30 June 2025 to keep high-end research activities in Australia
and maintain support for high-wage jobs. The measure is estimated to decrease
receipts by $1.7 million over the forward estimates period (Budget
Paper No. 2, p. 9).
The Government will provide $1.8 billion over four
years from 2020–21 to continue to support the aviation and tourism sectors as
part of the Government’s response to the COVID-19 pandemic, to support
transition to recovery, and to stimulate tourism (Budget Paper No. 2,
pp. 69–71 and media
release). It is not clear how much of this support is additional to that
previously announced. Only $285.2 million is identified in Budget Paper No.
2 (p. 69).
Access to the $94.6 million Zoos
and Aquarium program will be extended by six months to support zoos,
aquariums and wildlife parks to maintain their animal populations where their
tourism revenue has been affected by travel and social distancing restrictions.
The Government will also provide $14.1 million over three years from 2021–22
to the Great Barrier Reef Marine Park Authority to support tourism and to
conduct a review of the Authority’s current charging structure (Budget Paper
No. 2, p. 71).
Deregulation
A number of initiatives
under the Commonwealth’s Deregulation Agenda will benefit business.
A total of $10 million has been allocated over four
years from 2021–22 to modernise business communication by amending legislation
in the Treasury Portfolio to be technology-neutral (Budget Paper No. 2,
p. 68). According to a 20 April 2021
media release from the Assistant Minister to the Prime Minister and Cabinet,
Ben Morton, this refers to:
Legislative reform to key pieces of
legislation in the Treasury portfolio, including those governing corporations,
credit, superannuation and insurance, will provide tangible, broad-ranging
benefits for businesses of all sizes by enabling greater flexibility in the way
they communicate with each other, individuals and regulators.
Funding of $7.2 million over three years from 2021–22 will
be provided to invest in the improvement, maintenance and review of the Employment Contract Tool (developed
by the multi-government agency Employing
Your First Person Taskforce and available on business.gov.au) which helps
small-business employers to make basic employment contracts that comply with
workplace laws (Budget Paper No. 2, p. 68).
Some $3.9 million over two years from 2021–22 will be
provided to enable reviews to increase the transparency and accountability of
regulator cost recovery activities and reduce cost to business on an ongoing
basis (Budget Paper No. 2, p. 68). It is not clear who will be
undertaking the reviews.
Funding of $0.8 million (to be met from within the existing
resources of the Department of the Prime Minister and Cabinet and the
Attorney-General’s Department) has been allocated to the examination of options
that enable electronic document execution. Temporary regulatory relief allowed
company officers to execute documents with electronic signatures (rather than
requiring all signatories to sign the same physical document) during the
coronavirus crisis, but this expired on 21 March 2021 (see media
release). Reforms to statutory declarations laws and common law of deeds to
allow electronic document execution ‘could realise an estimated $400 million
in economic benefits for small and medium enterprises every year’ (see media
release).
Digital Economy Strategy
The cross-portfolio Digital Economy Strategy is being
partially funded by savings of $18.1 million over five years from 2021–22
(and an additional $4.2 million per year ongoing from 2025–26) by reducing
funding for the Incubator
Support Programme (now closed) and the Business
Research and Innovation Initiative (closes 3 June 2021) (Budget
Paper No. 2, p. 76). It includes the following measures relevant to
industry:
- $53.8 million over four years from 2021–22 to create a
National AI Centre (within CSIRO’s Data61) and four AI and Digital Capability
Centres to ‘drive and support small and medium enterprises … to adopt and use
transformative artificial intelligence technologies’ (Budget Paper No. 2,
p. 73). The Digital Capability Centres will be appointed through a competitive
process focusing on specific applications of AI, such as robotics or AI-assisted
manufacturing (see factsheet).
- $33.7 million over four years from 2021–22 to provide grants to
businesses to work with the Government to develop AI-based solutions to solve
national challenges (Budget Paper No. 2, p. 73). Challenges will
focus on the industry sectors of AI specialisation identified in: the Artificial
Intelligence Roadmap; the National
Science and Research Priorities; CSIRO
Missions; and the Modern
Manufacturing Strategy (see factsheet).
- $12 million over five years from 2021–22 to deliver
co-funded grants to support community and business-driven projects that build
AI capabilities in regional areas (Budget Paper No. 2, p. 73). Applicants
can include universities and publicly funded research bodies, technology
companies and regional businesses, including small and medium businesses (SMEs)
and start-ups (see factsheet).
- $18.8 million over four years from 2021–22 for a Digital
Games Tax Offset to provide a 30% refundable tax offset for eligible businesses
that spend a minimum of $0.5 million on qualifying Australian digital
games expenditure (Budget Paper No. 2, p. 73). The Digital Games Tax
Offset will be available from 1 July 2022 (see factsheet).
- $43.8 million over three years from 2021–22 to expand the Cyber
Security Skills Partnership Innovation Fund for industry and education
providers to deliver more projects that meet local requirements to quickly
improve the quality and quantity of cybersecurity professionals in Australia
(see factsheet),
and to ‘further secure and build capability across national priority sectors
identified in the Modern Manufacturing Strategy’ (Budget Paper No. 2, p.
74).
- $10.7 million over three years from 2021–22 to trial up to
four industry-led four-to-six month Digital Skills Cadetship pilots to develop
new and innovative pathways to increase the number of Australians with high-level
digital skills (Budget Paper No. 2, p. 75).
- $22.6 million over six years to establish the Next
Generation Emerging Technologies Graduate Program to provide up to 234
scholarships to support emerging technologies areas identified through the
Modern Manufacturing Strategy (Budget Paper No. 2, p. 74).
- $24.7 million over six years to establish the Next
Generation AI Graduates Program to attract and train up to 234 AI
specialists through competitive national scholarships (Budget Paper No. 2,
p. 73).
Other measures likely to benefit
industry
A number of other measures—from anti-dumping reforms, to a
temporary expensing extension, to skills development—will also benefit industry.
Funding of $5 million over the forward estimates (and $1.4 million
per year ongoing from 2025–26) has been provided for anti-dumping reforms which
include:
In a 12-month extension of an existing temporary measure
designed to encourage business investment, businesses with aggregated turnover
or total income of less than $5 billion will be allowed to deduct the full
cost of eligible depreciable assets acquired from 6 October 2020 and
used or installed ready for use by 30 June 2023. The aim is to
encourage businesses to make further investments, particularly in projects
requiring longer planning times. The temporary full expensing extension is
expected to reduce tax receipts by $17.9 billion over the forward
estimates period (Budget Paper No. 2, p. 29).
Under its Supporting
Regional Australia program, the Government has committed to ‘support to
undertake an independent study to identify the regulatory barriers to business
relocation into regional Australia’ (Budget Paper No. 2, p. 169). The
funding for this report is not disclosed due to ‘commercial sensitivities’.
Part of the Women’s Economic Security Package includes $42.4 million
over seven years from 2021–22 to establish the Boosting the Next Generation of
Women in Science, Technology, Engineering and Mathematics (STEM) Program by co-funding
scholarships for women in STEM in partnership with industry (Budget
2021–22: Women’s Budget Statement 2021–22, p. 53).
The Government will provide $89.3 million over four
years from 2021–22 ongoing to extend the eligibility from 1 July 2021 of the Tasmanian
Freight Equalisation Scheme assistance to eligible imported goods (shipped
to Tasmania via a mainland port) with no direct Australian-made equivalent. (Nearly
70% of the cost of the measure will be partially met from ‘within existing
resources’ of the Department of Infrastructure, Transport, Regional Development
and Communications). The aim of the measure is to provide greater assistance to
Tasmanian agriculture, forestry and fisheries, manufacturing and mining
industries (Budget Paper No. 2, p. 170).
Measures to assist small and medium
businesses
The SME
Recovery Loan Scheme is being extended to SMEs with a turnover of up to
$250 million (up from $50 million) which have been recipients of the JobKeeper
Payment between 4 January 2021 and 28 March 2021 or which are located or
operating in a local government area that has been disaster declared as a
result of the March 2021 New South Wales floods and were negatively economically
impacted (Budget Paper No. 2, p. 191). The Government will provide
participating lenders with a guarantee for 80% of secured or unsecured loans
(up from 50%) of up to $5 million (up from $1 million) for a term of up to
10 years (up from 5 years). Lenders will be able to offer borrowers a repayment
pause of up to two years. The financial implications of this measure are nfp
due to ‘commercial sensitivities’.
Budget Paper No. 2 (p. 19) identifies increased
powers (to pause or modify Australian Taxation Office debt recovery in relation
to disputed debts) for the Administrative Appeals Tribunal in relation to small
business taxation decisions. This measure is estimated to result in a ‘small
but unquantifiable decrease in receipts’ over the forward estimates.
To support SME participation in Commonwealth procurement,
$2.6 million (over four years from 2021–22) will be provided to map any
common ‘pain points’ for SMEs in the procurement process; target ‘Government
Procurement Learning Events’; mandate the use of ‘Dynamic Sourcing for Panels’
and undertake a pilot of direct engagement of SMEs by the DISER for contracts
up to $200,000 (Budget Paper No. 2, p. 145).
Under the Digital
Economy Strategy, measures designed to assist SMEs include:
- $12.7 million in 2021–22 for Digital Solutions providers to expand
the reach of the Australian
Small Business Advisory Service Digital Solutions program to up to 17,000
small businesses (see factsheet)
and
- $15.3 million over three years from 2021–22 for Treasury and
the Australian Peppol E-Invoicing Authority to promote and accelerate the
awareness and adoption of e-invoicing by businesses and across all levels of
Government (see factsheet).
In measures designed to build the Australian workforce,
‘cement’ Australia’s recovery and ‘secure’ her future prosperity, the Minister
for Employment, Workforce, Skills, Small and Family Business, Stuart Robert,
identified the following:
- $8 million for a two-year campaign to encourage people to
support their local small and family-owned businesses as they recover from the
impacts of the COVID-19 pandemic
- $0.9 million over four years from 2021–22 to support small-business
owners to take proactive, preventative and early steps to improve their mental
wellbeing through the Ahead for Business program and
- an extra $1.5 million for the Australian Small Business and
Family Enterprise Ombudsman to help small businesses identify and access
support for dispute resolutions.
Providing $15.5 million over two years from 2020–21 for
an additional 1,000 places under the New
Business Assistance with New Enterprise Incentive Scheme program and an additional
350 places under the Exploring
Being My Own Boss Workshop program, is designed to encourage more people to
start their own small business (Budget Paper No. 2, p. 90).
Under Building Australia’s Resilience, rural and regional
small businesses affected by drought, COVID-19 or the 2019–20 bushfires are
eligible for (a share of) $8.5 million in support, which has been extended
for a further six months (Budget Paper No. 2, p. 66).
Additional funding of $16 million over four years from
2020–21 has been allocated to ensuring the ‘effective operation’ of the Payment
Times Reporting Scheme that came into effect on 1 January 2021.
The scheme requires large businesses to report on their payment times to small
businesses (Budget Paper No. 2, p. 186). It is designed to: increase
transparency around the payment performance of large businesses; help small
businesses decide who to do business with; create incentives for improved
payment times and practices; and help the public make decisions about the large
businesses they buy from. Research from 2019 (see DISER
website) suggested that normalising a 30-day payment time from large
business to small businesses could have an estimated net benefit to the
Australian economy of $313 million per year.
Table 1: new commitments in the
2021–22 Budget for industry and small business
|
2020-21
$'000
|
2021-22
$'000
|
2022-23
$'000
|
2023-24
$'000
|
2024-25
$'000
|
Total to 2024-25
$ million
|
PAYMENTS
|
Sector
specific
|
Australian
Space Agency
|
|
3,400
|
3,300
|
3,300
|
3,300
|
13.3
|
Support
for an Australian Fashion Certification Trade-Mark
|
665
|
285
|
|
|
|
1.0
|
COVID-19 Vaccine Manufacturing Capabilities
|
nfp
|
nfp
|
nfp
|
nfp
|
nfp
|
|
Great
Barrier Reef Marine Park Authority
|
|
10,300
|
3,800
|
|
|
14.1
|
Deregulation
|
Modernise
business communication
|
|
2,700
|
2,600
|
2,600
|
2,100
|
10.0
|
Employment
Contract Tool
|
|
2,700
|
2,600
|
1,900
|
|
7.2
|
Regulator
cost recovery activity reviews
|
|
2,000
|
1,900
|
|
|
3.9
|
Digital
Economy Strategy
|
National
AI Centre and four AI and Digital Capability Centres
|
|
|
|
|
|
53.8
|
AI
solutions to national challenges
|
|
|
|
|
|
33.7
|
AI
capabilities in regional areas
|
|
|
|
|
|
12.0
|
Digital
Games Tax Offset
|
|
|
|
|
|
18.8
|
Cyber
Security Skills Partnership Innovation Fund
|
|
|
|
|
|
43.8
|
Digital
Skills Cadetship Pilot
|
|
|
|
|
|
10.7
|
Next
Generation Emerging Technologies Graduate Program (up to 2026-27)
|
|
|
|
|
|
22.6
|
Next
Generation AI Graduates Program (up to 2026-27)
|
|
|
|
|
|
24.7
|
Other
measures likely to benefit industry
|
Anti-Dumping
Commission advice to importers and local manufacturers
|
|
|
|
|
|
4.7
|
International
Trade Remedies Advisory Service
|
|
|
|
|
|
0.1
|
Study
to identify regulatory barriers to business relocation to regional Australia
|
|
|
|
|
|
nfp
|
Boosting
the Next Generation of Women in Science, Technology, Engineering and
Mathematics (over 7 years)
|
|
|
|
|
|
42.4
|
Tasmanian
Freight Equalisation Scheme - extension
|
|
7,200
|
5,700
|
6,700
|
7,800
|
27.4
|
Measures
to assist small and medium businesses
|
SME
Recovery Loan Scheme
|
nfp
|
nfp
|
nfp
|
nfp
|
nfp
|
nfp
|
Administrative
Appeals Tribunal and small business taxation decisions (no reliable cost
estimate)
|
|
|
|
|
|
|
SME
participation in Commonwealth procurement
|
|
700
|
700
|
700
|
700
|
2.6
|
Expansion
of Australian Small Business Advisory Service Digital Solutions program
|
|
12,700
|
|
|
|
12.7
|
Promotion
of e-invoicing
|
|
|
|
|
|
15.3
|
Campaign
to support local small and family-owned businesses
|
|
|
|
|
|
8.0
|
Ahead
for Business mental wellbeing program
|
|
|
|
|
|
0.9
|
Extra
funding for Australian Small Business and Family Enterprise Ombudsman
|
|
|
|
|
|
1.5
|
New
Business Assistance with New Enterprise Incentive Scheme program + Exploring
Being My Own Boss Workshop program
|
|
|
|
|
|
15.5
|
Support
for rural and regional small businesses affected by drought, COVID-19,
bushfires (part of $8.5 million)
|
|
|
|
|
|
8.5
|
Effective
operation of Payment Times Reporting Scheme
|
|
4,100
|
3,900
|
4,100
|
3,900
|
16.0
|
TOTAL
PAYMENTS
|
|
|
|
|
|
425.2
|
|
RECEIPTS
|
Sector
specific
|
Brewers
and Distillers
|
|
-55,000
|
-55,000
|
-55,000
|
-60,000
|
-225.0
|
Automotive
research and development tariff concession
|
-100
|
-400
|
-400
|
-400
|
-400
|
-1.7
|
Other
measures likely to benefit industry
|
Temporary
full expensing extension
|
|
|
-600,000
|
-10,900,000
|
-6,400,000
|
-17,900.0
|
TOTAL
RECEIPTS
|
|
|
|
|
|
-18,126.7
|
Source: Budget Paper No. 2.