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Monday, July 15, 2024

ADVANCE ACTION – Federal Budget

Federal Budget’s boost for business – The Federal Government has set ambitious and positive targets to counteract the COVID-19 crisis and growth in its
2020-2021 budget, which has seen an unprecedented amount of support for the business community. The scale of investment outlined in the budget is wide ranging and very substantial in its endeavour to protect existing jobs and create new ones. On the business front, there are a number of big changes that are important particularly to businesses in Cairns and Far North Queensland.

One of the most important of these is the extension of the instant asset write-off until June 2022 and the removal of the $150,000 cap, which enables businesses to buy eligible assets and write off the full cost of that in the financial year they buy it. This will be a real catalyst in encouraging businesses to continue to invest in equipment.

Another thing the Government is doing is to encourage business to invest by introducing the JobMaker hiring credit. It is offering $200 a week for each eligible employee aged 16-29 and $100 for those aged 30-35 who are currently on JobSeeker. This is about taking people off unemployment benefits and getting them back into work, which is really important.

However, there are still grave concerns in our region, which relies on tourism and hospitality, about what will happen after JobKeeper ends next March, albeit that the JobMaker program is a big step to support business, industry and employees. 

At the same time, the government is investing $1.2 billion to create 100,000 new apprentices over the next 12 months where they will pay half the wages of those apprentices. This is very substantial as well. In addition, they’re putting $1 billion towards creating 340,000
low-cost short-term training opportunities to help skill people who are unemployed or underemployed.

There are a number of other government investments that will boost our region’s economic sustainability and growth. Our home building sector will get a boost from the government’s initiative to guarantee 10,000 low-deposit home loans for low and middle-income wage earners.
This allows first-home buyers who may only have five percent of the bank’s required 20 percent deposit to access the government’s offer to guarantee a further 15 percent. With interest rates being historically low now, this is going to add more stimulus to home building in our region.

The addition of $2 billion into the National Water Infrastructure Development Fund can benefit projects like the North Johnstone Diversion Scheme, the Lakeland Dam project and the Nulligna Dam.

The government’s extension of the International Freight Assistance Mechanism (IFAM) has also been extended to June 30, 2021. Its subsidising of two flights a week from Cairns to Hong Kong with agricultural and seafood produce is making sure that our air exports from Cairns continue.

Tertiary education, which has been really hit hard by Covid, has been given a billion-dollar injection
for universities across Australia as well as $300 million for another 12,000 new university places, is a really positive step for our pursuit of a Cairns university hospital.  

Defence and tourism have also been given a lifeline. The $1 billion Defence spending will include a new HMAS upgrade and hopefully contribute to the Defence maintenance work in Cairns. Tourism has been given $350 million, $50 million which has been earmarked for areas that have been particularly hit hard such
as Cairns. The money injected will help with promotion and infrastructure to encourage the recovery of tourism. 

The Building Better Regions fund, which is a fund that many businesses in our region have received funding from in previous rounds, has been given another $200 million injection. This gives businesses another opportunity to reinvest in their business with some government assistance. 

Roads has been another area that has been given big dollars with $14 billion worth of new and accelerated infrastructure on roads, rails and bridges, so this is fantastic news. On top of that, the government has also announced $2 billion of safety-related programs over the next two years, so that’s terrific as well.

The government has set itself ambitious targets for economic growth next year, and we hope they come to fruition because they’re more positive than we had expected.

Certainly when Prime Minister Scott Morrison spoke to our recent Advance Cairns lunch he was confident the economy would rebound – providing borders are opened as soon as practical.

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