Federal Budget 2020-21: Competitiveness


TAXATION  

CME strongly supports the following Budget measures to support business confidence and kickstart further investment: 

  • Instant Asset Write-Off – Expanding full deductibility of eligible depreciable assets of any value (previously $150,000) for businesses with an aggregated annual turnover of up to $5 billion (previously $500 million) acquired from 6 October 2020 7:30 pm AEDT and first used or installed by 30 June 2022 (previously 31 December 2020). New or second-hand assets under the enhanced $150,000 instant asset write-off by 31 December 2020 will have an extra six months to first use or install those assets. 
  • Loss carry-backs – Tax losses incurred to 30 June 2022 for companies with a turnover of up to $5 billion can be offset against prior profits made in or after the 2018-19 financial year on which tax has been paid.  
  • Research and Development Tax Incentive – $2 billion in additional funding through removing the $4 million cap on annual cash refunds, lifting the rate for small claimants (turnover less than $20 million), increasing the cap on eligible R&D expenditure from $100 to $150 million per annum and streamlining the intensity tiers for larger claimants. The new rates will be the company tax rate plus 8.5 percentage points for initial R&D expenditure up to 2 per cent R&D intensity, and 16.5 percentage points for R&D expenditure above the 2 per cent R&D intensity. These measures will apply on or after 1 July 2021. 
  • Small business tax concessions – $105 million to increase the eligibility of businesses to access ten small business tax concessions (from a turnover of $10 to $50 million), e.g. immediately deduct start-up expenses, exemptions on Fringe Benefits Tax (FBT), simplified PAYG and GST rules, etc. 

ENVIRONMENT  

CME welcomes continued investment in streamlining regulation, including: 

  • Bilateral agreements – $10.6 million over two years from 2020-21 to progress negotiations with the states and territories on bilateral agreements for a single touch approach for approvals, removing duplication by accrediting states to carry out environmental approvals for Commonwealth matters. 
  • EPBC Act reforms – $36.6 million over two years from 2020-21 to maintain the timeliness of environmental assessments and undertake further reforms under the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act). 
  • Streamlining environmental assessments and approvals – $12.4 million over two years from 2020-21 to maintain the momentum established in timely environmental assessments and approvals through the 2019-20 Mid-Year Economic and Fiscal Outlook measure titled ‘Busting Congestion in the Environmental Assessment Process’. 
  • Environmental markets – $2.5 million in 2020-21 to support further policy work in response to the recommendations foreshadowed in the Interim Report of the Independent Review of the EPBC Act. 

ENERGY & EMISSIONS 

A focus on technology will support growth and jobs in industry. CME therefore welcomes the following announced commitments to improve the delivery of secure, reliable, affordable and lower emissions power: 

  • Australian Renewable Energy Agency (ARENA) – $1.4 billion over 12 years to continue funding ARENA to provide research and development investment for emerging low emission technologies to increase their commercial readiness. 
  • Technology Co-Investment Fund – $95.4 million over six years to establish a new fund supporting businesses to increase productivity and reduce emissions. 
  • Future Fuels Fund – $74.5 million over four years to create a new fund to help take advantage of hydrogen, electric and bio-fuelled vehicles. 
  • Hydrogen export hub – $70.2 million over five years to scale-up demand and take advantage of a high-powered source of energy. 
  • Carbon Capture Use and Storage Development Fund – $50 million over three years to invest in piloting carbon capture projects. 
  • Technology Investment Roadmap – $5.2 million over four years to support the implementation of the Technology Investment Roadmap through development of annual clean Technology Statements to identify priority technologies and create an ongoing Technology Investment Advisory Council. 
  • Clean Energy Regulator – $40.4 million over ten years to provide additional resourcing for the Emissions Reduction Assurance Committee, build IT infrastructure to support a new Australian Carbon Credit Units exchange trading platform and streamline the Clean Energy Regulator’s IT systems. 
  • Improving data and reporting – $25.3 million over four years to improve energy and emissions data analytics, tools and reporting to better support the Government’s commitment to deliver affordable and reliable energy. 
  • Big Battery – $28.5 million to fund initial investment in a Big Battery project to stabilise and increase capacity in the South West Interconnected System by 100 or 200 MWh, as well as extend WA’s microgrids program.  

TRANSPORT INFRASTRUCTURE 

CME is pleased to see the Government continue to invest in WA transport infrastructure, supporting safer roads, better connectivity and productivity of regional economies. Some of the latest funding injection of $1.1 billion will go to projects such as: 

  • Goldfields Highway – $16 million to construct and seal priority sections between Wiluna and Meekatharra. 
  • Wheatbelt Secondary Freight Network – $80 million of funding accelerated across the forward estimates. 
  • Karratha to Tom Price – $56 million to upgrade the corridor. 
  • Roads of Strategic Importance – Total of $736.2 million to upgrade Tanami Road (Alice Springs to Halls Creek corridor), Great Northern Highway (Newman to Katherine corridor, Stage 3 Ord River north section and Port Hedland Airport deviation) and Coolgardie-Esperance Highway (Emu Highway). 
  • Heavy Vehicle Safety and Productivity Program – $3.71 million for the Boodarie Strategic Industrial Area and Karratha Industrial Estate. 

OTHER MEASURES 

CME welcomes the following initiatives to improve competitiveness, resilience and integrity of doing business in Australia: 

  • Modernising Manufacturing Initiative – $1.3 billion to co-fund large manufacturing projects to scale up in priority areas such as resources technology, critical minerals processing, recycling and clean energy.  
  • Manufacturing Modernisation Fund – $52.8 million expansion of the fund to co-fund capital investments and associated reskilling of medium-sized businesses with up to 199 employees to be technologically efficient and transformative in their manufacturing processes. 
  • Advanced Manufacturing Growth Centre and Industry Growth Centres – $50 million in additional funding to support the METS sector. 
  • Supply Chain Resilience Initiative – $107.2 million to address identified domestic vulnerabilities such as PPE and chemicals. 
  • Foreign Investment Framework – The Government will invest $86.3 million over the forward estimates to develop a new ICT platform to support more effective and efficient foreign investment application processing. This is in addition to the $54.1 million committed earlier this year. 
  • Heritage – $2.2 million to reduce the backlog of applications and support the effective protection of heritage and timely administration of new applications under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984
  • Exploration – Continued commitment to fund $100.5 million for exploration and geoscientific knowledge through Geoscience Australia’s ‘Unlocking Australia’s Resources Potential: Exploring for the Future programme’.