The Labor Party won a majority of seats in the lower house at the Federal election held on 21 May 2022 and now forms government under the leadership of Prime Minister Mr Anthony Albanese. In this article, we take you through some of the big-ticket items to expect in the upcoming Budget scheduled for 25 October 2022, and the coming term from the new Government.
- Buy Australia Plan – a 10-point Buy Australian Plan will be introduced to support Australian businesses and jobs. The plan includes changes to the Commonwealth Procurement Rules.
- Tackling modern slavery – a new Anti-Slavery Commissioner position will be established by the Government to improve transparency of supply chains and compliance with new modern slavery laws.
- Child care – in excess of $5 billion will be spent to reduce child care costs by lifting and extending subsidies. The Government estimates that such measures will assist over 1 million families and enable greater workforce participation, ultimately benefitting businesses.
- National Reconstruction Fund – the Government will establish a fund to invest in and guarantee industrial projects, and develop existing and emerging industries such as primary production, transport, science and renewable energy. The fund should exceed $10 billion.
- Tax Avoidance Taskforce – the Australian Taxation Office will be provided with an additional $625.6 million to extend the taskforce’s activities for a further two years to 2025. Additional compliance activities are expected to increase tax receipts by $2.1 billion for this period.
- Reduce spending in the public service – the Average Staffing Level cap will be abolished to ensure that permanent jobs are offered in the Australian Public Service rather than work being completed via contracting, consultant and labour hire arrangements. This could see in excess of $2 billion reallocated away from such arrangements between 2023 and 2026.
- Waste audit – the Department of Finance and the Treasury will conduct a waste audit across spending portfolios to identify additional savings to repair the budget.
- National Anti-Corruption Commission – $40 million will be allocated by the Government to the establishment and implementation of a new anti-corruption commission.
- Fees for the Foreign Investment Review Board (FIRB) – the Government plans to increase fees relating to the FIRB. Current projections estimate that such increases will amount to approximately $420 million between 2023 and 2026.
- Multinational corporations – the Government will support the Organisation for Economic Co-operation and Development’s (OECD) implementation of the global minimum tax rate of 15% for multinational companies. Changes will also be made for the reporting requirements for such firms.
- Pacific Labour Scheme – the Government aims to strengthen Australia’s partnerships with Pacific island nations by delivering new programs, including the establishment of a new Australia Pacific Defence School.
- Water reform – the Government will introduce a National Water Commission to work across the States to secure water supply for primary producers, and rural and regional Australia.
- National Rail Manufacturing Plan – more trains will be built in Australia and separately, there will be additional opportunities for local businesses to identify export markets for their products.
- Upgrading the NBN – additional fibre will be rolled out as part of expanding and upgrading existing NBN infrastructure.
Environmental, Social and Governance (ESG)
- Electric car discount – discounts on tariffs and taxes that apply to electric cars will be implemented from 2023, including a 5% reduction in the tariffs that apply to certain imported vehicles and the abolition of Fringe Benefit Tax on electric cars.
- Rewiring the nation – $20 billion will be invested to re-wire and upgrade existing electricity infrastructure to accommodate renewable energy.
- Community batteries – the Government will install community batteries across Australia to capture and store energy. This initiative would cost in excess of $200 million between 2023 and 2026.
Education, skills and youth training
- More university places – 20,000 new university places will be offered. These places will be prioritised in favour of universities offering more opportunities for under-represented groups. The 10% upfront discount for university fees will also be abolished.
- Fee-Free TAFE – 465,000 fee-free TAFE places will be offered. These places will focus on courses relating to industries most affected during the pandemic with a skills gap including hospitality, tourism, child care, aged care, disability care, nursing and community services.
- Teacher shortages – the Government will adopt a plan to double the number of high-achieving students who select teaching as a career. This includes providing bursaries for high-achieving students to study teaching.
Health and aged care
- Medicare grants program – the Government will invest $220 million to assist GPs to upgrade IT systems to support telehealth consultations, up-skill staff and purchase new equipment. Overall, this should enable GPs to assist additional patients.
- Aged Care – $2.5 billion will be invested by the Government in aged care, including changes to nursing ratios and implementing mandatory nutrition standards for food.
Please contact a member of our tax team to discuss any aspect of the above further.
This article was written by Vincent Licciardi, Partner, Kathy Tran, Senior Associate, Thaivini Sathiyaseelan, Law Graduate, and Erin Upson, Law Graduate.