Professionals Australia has carefully digested the most recent Federal Budget, handed down in May, and pulled out the information relevant to members.
In the sections below, you’ll find brief summaries of the changes/announcements in the recent budget.
For additional information on the Budget and how it might impact your profession, please contact the team at email@example.com.
The Government will not progress the Automotive Transformation Scheme — reduction in funding measure announced in the Mid-Year Economic and Fiscal Outlook 2013-14, and the Automotive Assistance — reduced funding measure announced in the 2014-15 Budget,
The Government believes most of the $900 million cuts to the scheme, announced in these measures, will be realised as a result of the shutdown of the automotive manufacturing industry.
Funding for the Automotive Transformation Scheme will continue at a total of $ 683.4 million over the next 4 years. Unfortunately this will not save member’s jobs lost in Holden and Toyota.
Infrastructure Australia is a statutory body established on 1 September 2014 following amendment of the Infrastructure Australia Act 2008. According to the Budget, “Infrastructure Australia is responsible for providing independent advice for:
- improved decision-making on infrastructure matters;
- better identification and assessment of key drivers of infrastructure demand and utilisation;
- improved prioritisation of infrastructure projects; and
- promotion of best practice infrastructure planning, financing, delivery and operation.
Persons interested in the specific priorities of Infrastructure Australia are encouraged to read more here.
Infrastructure Australia will receive $11.8 million in 2015/16 to deliver on its priorities, and will receive a staff increase from 11 to 15.
While this modest staff increase is a positive start, Professionals Australia believes Infrastructure Australia requires more resourcing and more input from industry to best achieve its purpose.
We encourage members to support Professionals Australia Better Infrastructure campaign, which will be advocating to Infrastructure Australia by clicking here.
The Federal Government has reaffirmed its commitment to a $50 billion infrastructure package in the 2015/16 budget, representing a fall in spending over the next four years of 11% in real terms.
The centrepiece for the Government’s infrastructure Budget announcements is the $5 billion Northern Australia Infrastructure Facility. Essentially, this will be a concessional loan facility established to encourage private sector investment in infrastructure like ports, railways, pipelines and electricity generation.
The following is a list of federally funded infrastructure projects:
New South Wales
- Western Sydney Infrastructure Plan: $2.9 billion with $209.7 million provided in 2015–16
- Pacific Highway duplication: $5.6 billion with $542.5 million provided in 2015–16
- WestConnex: $1.5 billion plus a concessional loan of up to $2 billion to accelerate the New M5 section with $450.0 million provided in 2015–16
- Northern Sydney Freight Corridor: $691.6 million with $100.9 million provided in 2015–16
- NorthConnex: $405 million with $143.0 million provided in 2015–16
- M1 Productivity Package: $195.8 million with $11.0 million provided in 2015–16
- Bruce Highway: up to $6.7 billion with $500 million provided in 2015–16
- Gateway Motorway North: up to $929.6 million with $50 million provided in 2015–16
- Toowoomba Second Range Crossing: up to $1.285 billion with $316.65 million provided in 2015–16
- Warrego Highway: $508 million with $101.5 million provided in 2015–16
- Cape York Region Package: $208.4 million with $48 million provided in 2015–16
- Moreton Bay Rail Link: $518.4 million with $102 million provided in 2015–16
- Western Highway—Ballarat to Stawell Duplication: $501.3 million with $73.1 million provided in 2015–16
- Tullamarine Freeway Widening (Section 1): $200 million with $19.7 million provided in 2015–16
- Princes Highway West—Winchelsea to Colac Duplication: $185.5 million with $20.7 million provided in 2015–16
- St Albans Road Rail Level Crossing: $151 million with $110.9 million provided in 2015–16
- Princes Highway East—Traralgon to Sale Duplication: $210 million with $20 million provided in 2015–16
- Perth Freight Link: $925 million with $87.9 million provided in 2015–16
- Gateway WA Perth Airport: $675 million with $139.46 million provided in 2015–16
- NorthLink WA—Swan Valley Bypass: $615 million with $66.4 million in 2015–16
- NorthLink WA—Tonkin Highway Grade Separations: $141 million with $42 million provided in 2015–16
- Great Northern Highway (Muchea to Wubin): $307.8 million with $77.1 million provided in 2015–1
- North West Coastal Highway (Minilya to Barradale): $172.7 million with $51.3 million provided in 2015–16
- The Commonwealth has provided an additional $499.1 million for road infrastructure to assist the Western Australia as a result of a GST revenue shortfall in 2015–16
- North-South Corridor—Darlington interchange: $496 million with $82 million provided in 2015–16
- North-South Corridor—Torrens Road to River Torrens: $448 million with $80 million in 2015–16
- Anangu Pitjantjatjara Yankunytjatjara (APY) Lands: $85 million with $20 million provided in 2015–16
- Midland Highway: $400 million with $57.1 million provided in 2015–16
- Freight Rail Revitalisation: $ 59.8 million with $16.5 million provided in 2015–16
- Brooker Highway (Elwick-Goodwood to Howard Road): $25.6 million with $8.9 million provided in 2015–16
- Northern Territory Roads Package: $77.0 million with $35.4 million provided in 2015–16
- Regional Roads Productivity Package: $90.0 million with $49.1 million provided in 2015–16
- Tiger Brennan Drive Duplication (Dinah Beach Road to Berrimah Road): $70.0 million with $22.1 million provided in 2015–16
Australian Capital Territory
- Majura Parkway: $111.1 million with $6.9 million provided in 2015–16
The Budget announced it would implement an R&D tax incentive where companies can claim a refundable tax offset of 43.5 per cent if their turnover is less than $20 million or a non-refundable tax offset of 38.5 per cent.
There will be a cap of $100 million on the amount of eligible research and development (R&D) expenditure for which companies can claim a tax offset at a concessional rate under the R&D tax incentive. Expenditure beyond the $100 million cap will receive a lower offset at the company tax rate.
The 2015-16 Federal Budget proposes a range of measures that aiming to stimulate small business activity across Australia.
Overall, the measures are expected to cost the Government $5.5 billion, addressing issues such as the tax burden on small businesses and encouraging investment for growth. Major policies announced in the federal Budget include:
- A cut in the corporate tax rate for small businesses to 28.5%, down from a 30.0%. The tax cut applies to small businesses with annual revenue of less than $2.0 million. The policy is expected to cost $3.3 billion over the next four years.
- Small businesses will be able to claim an immediate tax deduction of capital expenditure on items costing less than $20,000. This represents an very significant increase on the current $1,000 threshold. Businesses can apply the deduction on as many items as they like. The policy is expected to encourage small businesses to bring forward investments that will enable them to grow. The policy is expected to cost $1.8 billion over the next four years.
- Start-ups will be able to immediately deduct professional expenses incurred when starting new businesses. The policy will provide some much needed relief for new businesses. The policy is costed at $30.0 million over the next four years.
- Small businesses will be exempt from fringe-benefit tax on small, portable electronic devices. The policy reflects the modernisation of Australian businesses, where these devices have become the norm.
In more good news for small businesses, the early signs are that the opposition supports most of the package for small businesses, making these policies more likely to pass through parliament.
The $300m reprieve for the National Collaborative Research Infrastructure Scheme has been confirmed. The Clarke review of the NCRIS scheme which is looking at long-term funding solutions is expected to report back by the end of August.
One-off funding to keep Synchrotron operating in 2016-17 was announced – with $13m in new funds totaling $20m from the Commonwealth. The rest of the $30m annual operating cost will come from the Victorian Government and the New Zealand Synchrotron group.
Australian Research Council
At this stage it appears the Australian Research Council has not been cut this year and that funding reductions in the budget papers are the second instalment of cuts announced in the 2014 Budget.
Sustainable Research Excellence (SRE) in Universities
A $263m cut from university research (the SRE program of the ‘block grant’) over 3 years from 2016/17 to fund NCRIS was announced.
Medical Research Future Fund (MRFF)
$10m has been set aside for the MRFF by Health Minister Sussan Ley.
Future of the higher education deregulation bill
The 20 per cent cut in Federal Government allocation per Commonwealth supported student place remains on the table. Education Minister Pyne has another 12 months to negotiate reforms through the Senate. This means ongoing frustration for peak university groups including Universities Australia, Group of Eight and Innovative Research Universities.
Future Fellows scheme
The Future Fellows scheme has survived with the Government offering 50 four-year appointments in 2015. This keeps the program active while the higher ed deregulation legislation remains in the Senate. The Future Fellows program was established in 2008 to keep mid-career Australian researchers from moving overseas and to attract those who had moved overseas back to Australia.
A $26.8m cut to the CRC Program on top of $80m in cuts in last year’s budget and in spite of the Miles Review of the program yet to report back.
- $1.58 billion for new and amended listings of medicines on the Pharmaceutical Benefits Scheme (PBS)
- $485 million over four years to continue the operation of the personally controlled electronic health record (PCEHR), make improvements and implement trials
- $26.4 million over four years to improve immunisation coverage
- $20m for a campaign against illicit drugs, particularly ice
Other measures include:
- Completing reviews of the Life Saving Drugs Programme, PBAC Guidelines and PBS .
- A Primary Health Care Advisory Group will investigate new funding models to deliver better care, particularly for chronic conditions.
Few budget measures relate directly to pharmacy, however, as negotiations for the 6CPA is near finalisation.
We are concerned that given the rise in chronic illness and the ageing of the population the following cuts will impact negatively on health:
- $1.95 billion reduction in hospital funding
- $121 million “rationalisation” in indigenous health programs