The Federal Budget was delivered on 11 May by Treasurer Josh Frydenberg and as previously indicated, it was not an austerity budget to address debt and deficit. But a shift, as some have said in ideology for a conservative government, to a big-spending approach. The budget seeks to address jobs and growth and continue building and securing the country’s rebound from the pandemic.
Beyond the tax incentives which have been widely reported, we have delved deeper into the Budget Papers to identify specific opportunities for industry sectors. Opportunities that may present prospects for growth for your business, depending on your industry sector. As we covered the tax deductions, investment allowances and wage subsidies in another article, here we focus on how spending by the Federal Government may open up channels for new work for your business.
As we provide equipment loans, plant and machinery finance for many businesses across all industry sectors, we’re casting our report across as many as we can to inform and advise you of what’s there for to capture.
Aged Care Sector
Aged care is a big beneficiary in the budget as the government implements recommendations of the Royal Commission. While much of the spending is for the provision of services, it may present the opportunity for providers and suppliers to the sector to invest in new equipment.
This could be medical and health-related equipment or general business and office equipment such as technology, IT systems and general office equipment.
Digital Games Industry
Gaming has become an extremely popular activity and the government has recognised that by cutting the costs associated with game development developers are set to gain a 30% refundable tax offset (capped at $20m pa) for qualifying expenditure. If that means investing in tech equipment, speak with us about technology leasing refinancing options.
Trades in the building and construction area are set to gain with amendments to the HomeBuilder program. This was introduced in 2020 but issues around commencement deadlines caused problems. Issues with the supply of building materials have further exacerbated the problems. The commencement of construction has now been extended through to 18 months.
Manufacturing and Processing
The 10 years Modern Manufacturing Strategy is already being implementing and will continue with further investment. This is addressing supply chains and our sovereign capabilities by encouraging Australian companies to invest in manufacturing facilities and processes.
Grants will be available for businesses to build capabilities to identify and address vulnerabilities in supply chains in critical areas. Capabilities for onshore vaccine manufacturing are also being expanded with potential opportunities for businesses either directly or indirectly involved with both the COVID-19 vaccine and future vaccination programs.
Waste and recycling also receive attention through environmental initiatives as do energy projects in hydrogen bubs, securing energy sources and renewables.
Spending on Infrastructure
For our customers across many areas including earthworks, civil works, trades, materials handling and transporting, construction and related businesses, infrastructure projects always represent great potential for new work.
2021/22 Federal Budget does not disappoint with projects spread across all states and territories, in major cities and regional areas. Work looks like being available through a significant pipeline of projects including:-
- Victoria: Geelong Fast Rail; upgrades to southeastern and northern road; Melbourne Airport Rail Link; and North East Link http://www.opv.vic.gov.au/Pipeline
- Queensland: Roads continue to get Government funding with Gateway Motorway, Bruce Highway and Coomera Connector included in the budget spending. Link https://www.qld.gov.au/transport/projects/all-projects
- New South Wales: the state government is working with the federal on multiple infrastructure projects and those mentioned in the budget include the M12 motorway, a further extension to the M1 at Raymond Terrace, WestConnex and the Sydney Metro section connecting with the new Western Sydney Airport. More info.
- Tasmania: funding for the revitalisation of freight rail, replacing the Bridgewater Bridge and works on the Midway Point Causeway has been allocated in the budget.
- South Australia: improvements and upgrades in Hahndorf receive funding as does the electrification of the Gawler rail line.
- Western Australia: METRONET on the Morley-Ellenbrook line receives funding along with the Northlink and Bunbury outer ring road.
- Northern Territory: The NT is set to benefit from Central Arnhem road and gas industry road upgrades as well as the Buntine and Carpentaria Highways.
- ACT: funding includes Molonglo River Bridge, Light Rail Stage 2A and Monaro Highway upgrades.
- Gas infrastructure projects have also been earmarked.
Support for Agriculture
Assisting farmers to achieve their 2030 goals of increases in farm gate output is budgeted with a spend in excess of $800m. In addition, attention is being paid to reducing weeds and pests and to upgrading the country’s biosecurity systems.
Drought has devastated many farmers and producers over the past decades and funding has been earmarked for programs in resilience, risk management and better technologies and practices. More information on the 2021 Federal Budget here.
Making the Most of Opportunities
While the Budget includes funding for many projects, it will be the responsibility of many businesses to invest in their own machinery and equipment in order to realise the benefits flowing from these projects or to engage in carrying out the works.
Jade Equipment Finance offers cheap interest rate finance for the acquisition of all types of equipment and machinery with the full range of commercial finance facilities available. To compare multiple banks and lenders, use our online equipment finance interest rates chart.
Contact 1300 000 003 to discuss a finance package for your requirements.
DISCLAIMER: IF MISINTERPRETATIONS, MISREPRESENTATION OR ERRORS EXIST IN THIS ARTICLE, NO LIABILITY IS ACCEPTED. THE INFORMATION IS PROVIDED ONLY FOR GENERAL PURPOSES AND NOT IN ANY MANNER INTENDED AS THE ONLY SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADDITIONAL GUIDANCE OR ADVICE SHOULD REFER TO AN INDEPENDENT FINANCIAL ADVISOR.