Published: 08 Oct 2020
Some wins for business in the 2020 Federal Budget
The good news for the millions of Australian businesses dealing with the ongoing uncertainty of COVID-19 is that the 2020 ‘Pandemic Budget’ seems to have delivered some much-needed wins.
Given the focus of the Morrison Government’s Budget has been business recovery and job creation, we’ve summarised here the key business-related proposals that may affect Energy Super’s employers and partner associations.
It’s important you keep abreast of the incentives and tax cuts available to you and your business. For the full detail, refer to the Government’s budget website and get appropriate tax and accounting advice where necessary.
Let's start with super
While it wasn’t a key item – and in fact it received far less attention than expected – there was a handful of super announcements that may impact employers and the way they manage super when hiring a new employee.
Under one of the proposals, designed to reduce the number of multiple accounts, an employer must find out from the Australian Taxation Office if a member has an existing super fund and pay super to that fund – unless the employee says otherwise. The details aren’t clear if this process will override the current process where a super fund is nominated in an existing EBA.
Other reforms include holding underperforming super funds to account and increasing the transparency of a super fund’s investment decisions. Of note, there was no proposal to extend the Early Release of Super scheme introduced in April at the height of the COVID-19 crisis. This scheme remains set to expire on 31 December 2020.
Businesses are set to receive $31.6 billion in proposed tax breaks, which is almost double the $17.8 billion of personal tax cuts that have been brought forward for individuals:
- In a bid to spark investment, businesses will be able to write off the full value of eligible assets until June 2022.
- Businesses will be allowed to write off losses against past profits to generate a tax refund.
- Proposed changes to fringe benefits tax will allow training courses provided by employers to be exempt, even if the training is not relevant to a worker’s existing role.
- The annual turnover required to obtain a small business tax concession is proposed to increase from $10 million to $50 million.
According to the Treasurer, ‘there is no economic recovery without a jobs recovery’. So there are quite a few incentives on the job creation front:
- The new JobMaker Hiring Credit will pay employers a credit for each new job they create if they hire a young worker between age 16 and 35.
- The Boosting Apprenticeships Wage Subsidy will support up to 100,000 new apprentices and trainees each year.
- Another new initiative – the JobTrainer Fund – will provide additional free or low-fee training places to allow workers opportunities to retrain and upskill into sectors with job opportunities.
Manufacturing support and infrastructure spending
In an effort to bolster local production and strengthen supply chains affected by COVID-19, the Budget proposes to boost the manufacturing sector:
- The Government’s Modern Manufacturing Strategy aims to deliver co-funding for a range of large manufacturing projects. The intention is to support a more competitive manufacturing sector that can employ more Australians.
- The main manufacturing priorities are: Resources technology and critical minerals processing; Food and beverage; Medical products; Recycling and clean energy; Defence; and Space.
The big talking point, though, has been the big spending on infrastructure, which has seen the introduction of several new projects and the acceleration of existing ones. The projects are expected to create thousands of jobs and build the country’s future cities. These include the Coomera Connector in Queensland, the Wheatbelt Secondary Freight Network in Western Australia, and the Main South Road Duplication in South Australia.
Energy industry initiatives
A number of announcements affecting the energy sector will be of particular interest for Energy Super’s employers in energy and related industries, including:
- Investment in new energy technologies with the overall aim to reduce emissions and increase productivity.
- Continued funding for renewable and clean energy bodies, and investment in network infrastructure, dispatchable generation and reliable supplies in the National Electricity Market.
- Funding for research and development into emerging low emission technologies, and solutions for recycling and reuse of plastics, tyres and other hard-to-recycle waste.
- A fuel security plan proposes to increase the resilience of the Australian economy to international fuel supply shocks. It’s also proposed to help secure jobs in fuel-centric industries.
Find out more
This is a wide-ranging budget that cuts across a number of key sectors. You’ll find all the detail on the Government’s budget website. Just remember that these announcements are proposals only and are yet to be passed by Parliament.
We’re here for you and your business. If you need information on super and the Fund, contact us at any time.