The Hon Christopher Pyne has handed down his impact-analysis for South Australian businesses following last week’s release of the federal budget at the first Showcase SA Budget Breakdown, presented by Bentleys.
Mr Pyne emphasised that Australia’s budget and economic health – while disastrous in the context of a pre-COVID world – was in far better shape than comparable nations.
The budget is, he observed, a low-tax, pro-business budget that invests its spending to encourage economic recovery and, hopefully in the coming years, growth.
For instance, by bringing forward the 2022 tax cuts to this budget and backdating them to July 1 2020, the federal government will put up to $5000 back into taxpayer pockets.
The majority of businesses will be able to immediately write-off eligible asset expenses, with a hope of creating 50,000 new jobs.
And, subject to conditions, the government hopes to use the JobMaker hiring credit to create 450,000 jobs by offering a $200 (for 15 to 30-year-old workers) and $100 per week (for 30 to 35 year olds) wage supplement, while the $1.2 billion investment in a JobTrainer fund will pay 50% wage subsidies for 100,000 trainee and apprenticeships and 12,000 commonwealth supported higher education places.
For Mr Pyne, there are three key things he hopes to see the South Australian government and other key players take advantage of:
The federal budget’s infrastructure spend
There is much more new infrastructure investment in the budget which will enable local government to get the ball rolling on new projects.
Some of that investment includes $1 billion for for local roads and community infrastructure, $2 billion for road safety projects, $3 billion in extended housing construction support, and $2 billion for water infrastructure.
Expending that money and speeding up projects will be very important for not just current, but also future projects.
Competition between states and territories will be highly competitive, so being genuinely ‘shovel ready’ with projects is essential.
$1.3 billion of manufacturing investment
As a manufacturing state, South Australia needs to take advantage of opportunities in food production, recycling and medical device manufacturing among others.
Taking advantage of our existing industries and the $1.3 billion on offer by the federal government as part of this federal budget is important, because if SA doesn’t, another jurisdiction will.
Through Lot Fourteen, established companies and startups looking to take advantage of our burgeoning space industry, South Australia is well positioned to gain mileage through its active and established presence in space and to convert this into new economic opportunities.
The federal budget spend on skills
South Australia was the only state that grew its apprenticeships across the country in the December 2019 quarter (by 9.3%), whereas every other state went backwards.
Thanks to the demand of the state’s defence industry, SA has a surge in traineeships and apprenticeships; and by creating new training and employment, we can attract more young people to South Australia and grow our local economy.
For SA, taking advantage of the training incentives and supplementation on offer in the budget to encourage skills growth will be very important.
See photos from the Showcase SA Budget Breakdown presented by Bentleys here.