The Federal Budget delivers little in direct relief for business costs and energy price increases but may offer operators in some sectors with opportunities.
The October Budget or more precisely the mini-budget was delivered by Federal Treasurer Jim Chalmers on October 25th
and has been widely assessed as having essentially no direct relief for businesses or consumers in regard to spiraling costs. In the lead-up, the Treasurer said it would be a ‘bread-and-butter’ budget and present a responsible approach to costs of living. Individuals can decide if they consider that is the case with the measures and policies included.
As this is the first Albanese Government budget post-election, it delivered on some promises made during the election campaign but in the opinion of many, failed to deliver on directly reducing energy bills. The Treasurer did say this budget was a first stage as the Government was taking a longer view of resetting the national accounts, especially dealing with deficit. To some experts, this is seen as putting some of those hard decisions which will need to be made or should be made. Those could come in the May 2023 Budget which is the usual timing for the annual Federal Budget.
For business owners and operators there are many aspects to consider and the significance to individual enterprises will depend on the size and scope of the business and the industry sector where it primarily operators. For SMEs, sole traders and owner-operators, the measures introduced for individuals, such as child care support, may be significant. Personal and business income for many sole operators is closely entwined.
When assessing a government budget, this or any other, with a view to making business decisions, special attention should be paid to the actual timing of the measures and/or policies. Many announcements are made in budgets which are not actually scheduled to come into effect until some time down the track. Some expenditure items, while sounding impressive, may be spread over quite a few years.
Another aspect to stay across is that Bills attached to the Budget need to pass Parliament before they can actually happen. With the Senate not being held by Labour, this could result in some amendments before Budget measures are passed and implemented.
Key Budget Points
The complete Federal Budget document
is available for review and consideration of the detail in regard to individual business and industry relevance and opportunities.
Key points of note:-
- Child care and parental leave extended - phased in over several years.
- Plan to construct 1 million homes in a five year period through establishment of an accord with relevant stakeholders and organisations. Commencing 2024.
- Spending for infrastructure projects across the country.
- Changes to Industrial Relations (IR) laws to grow wages.
- $25 billion for climate change – enabling greater use of renewables through grid changes.
- Support for hydrogen-fueled heavy vehicles through a Driving the Nation Fund. This includes investments to reduce transport emissions – highway electric vehicle charging infrastructure and major freight routes becoming ‘hydrogen highways’.
- Cuts to FBT and import tax on EVs to make vehicles cheaper and motivate take-up.
- Small business grants to allow implementation of upgrades to more energy efficient operations.
The Housing Accord will be of interest to those operating in the residential construction sector and the Ai Group
has prepared a paper discussing the proposed measures.
For those operating in the infrastructure sector, interest will be on what projects are coming into the pipeline:-
Finance and Commercial Loans Implications
- Sydney to Newcastle NSW – high speed rail plus upgrades to roads in Sydney’s west.
- In Victoria, the Suburban Rail Loop and Barwon Heads Road.
- The Bruce Highway and the Kuranda Range Road in Queensland are slated for upgrading.
- South Australia roads noted for upgrades include the Dukes, Augusta and Stuart Highways as well as the Southern Expressway.
- For Western Australia, Perth is due to receive electric bus charging facilities and Tanami Road is slated for an upgrade.
- Key road links in Tasmania are included for an upgrade.
- Central Arnhem Road is just one of the Northern Territory upgrades included in the Budget.
- Stage 2A of the ACT Light Rail is included.
There is no impact on commercial loans as a result of budget announcements. The selection, format and structure of finance products
remain unchanged. The inclusions in the Budget however, may present opportunities for business owners to invest in their operations with new machinery and equipment and in new electric vehicles.
Not surprisingly considering the economic conditions, there is no mention of further expansion or extension of business tax measures such as temporary full expensing. But that measure is still available through to 30 June 2023. Chattel Mortgage
is seen as best-suited for utilising this accelerated asset depreciation measure.
The next phase of the Federal Budget process is for individual Bills to go through the legislative process. The IR Laws have passed through the lower house but will concerns from many business groups, it will be interesting to see how they progress through the Senate.
Contact Business Finance on 1300 000 033 to discuss commercial loans to support your business capture opportunities presented in the Federal Budget.
DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.