The Federal Budget And Its Impact On The Electrical Industry

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14 May 2014

Joe Hockey last night released his first federal budget, in what was described as the most important budget since Peter Costello’s first for the Howard Government in the mid-90s.

How will it affect Master Electricians members and the electrical industry?

Company tax cut of 1.5 per cent
The treasurer stated in the speech that company tax would be cut by 1.5 per cent, however there are no figures in the budget papers clearly outlining what a small business is or when this may commence. Master Electricians Australia (MEA) will monitor this and begin advocating for its introduction as soon as possible. Over the coming years, as the budget and actual expenditure results develop, we will see how and when the Government will implement this much-needed relief.

Carbon Tax and the Mineral Resource Rent Tax
These taxes are to be abolished, however this will obviously depend on the passing of the appropriations bill through the Senate in the coming days. Early media reports today indicate this may be difficult and that the Government will have its work cut out to see these passed.  

Superannuation Guarantee
It was confirmed that the scheduled incremental rises in the superannuation guarantee charge will continue to be delayed.

Mature Aged Workers Incentives
Employers who employ mature aged workers aged over 50 years who have been out of work for six months or more will receive up to $10,000 in payments to assist offset costs. MEA understands that this will be particularly targeted at those who have been on welfare benefits for a period of time, however it will be interesting to see how this may interact with the Trade Loans for re-skilling workers into a new career. The $10,000 payment will be staggered over a two year period, based on length of employment.

The budget sees a total infrastructure investment of $50 billion over a seven-year period, with up to $39 billion invested over the 4 year forward estimate.  Each state has had a number of projects identified but projects consist mainly of upgrades to roads.

Increases of the Excise Tax
This will obviously affect all of our members and our industry as a whole and has not been welcomed, however the undertaking to directly link the funds raised from this tax to future road projects and upgrades is a major step forward, and will assist businesses in the long term whilst driving economic growth.  The index will be reviewed every 6 months and aligned to CPI. 

Apprentice Tools for Your Trade
The Tools for Your Trade program will cease from 1 July 2014, and financial assistance for apprentices will be supplied through the newly established Trade Support Loans Program. These Trade Support Loans will be provided at concessional interest rates and capped at $8,000 in the first year of the apprenticeship, $6,000 in the second, $4,000 in the third and $2,000 in the fourth. They will be available to apprentices undertaking a Certificate III or IV qualification that leads to an occupation on the National Skills Needs List. Apprentices will be required to commence repaying the loans when their income exceeds a minimum repayment threshold ($53,345 in 2014‑15) consistent with arrangements applying to university students under the Higher Education Loan Program (HELP). Apprentices who successfully complete their training will receive a 20 per cent discount on the amount to be repaid.

Industry Skills Fund
An Industry Skills Fund has been established and will provide $476 million over four years from 1 January 2015, to support the training needs of small to medium enterprises which cannot be readily met by the national training system. Industries targeted will include: health and biomedical products; mining, oil and gas equipment technology and services; and advanced manufacturing, including defence and aerospace.

Australian Renewable Energy Agency
The Agency will cease, however the Government is establishing the Emissions Reduction Fund including $2.55 billion to provide incentive based action by businesses to reduce emissions. 

Solar Towns program  
The program will provide $2.1 million over three years from 2014‑15 to community groups, such as sports clubs, seniors' clubs and scout centres, to support the installation of solar photovoltaic and solar hot water systems, and reduce energy costs in the electorates of Corangamite, Bendigo and McEwen in Victoria, Moreton and Bonner in Queensland and Lyons in Tasmania. Grants will also be available to community groups in the City of Monash in Victoria and the Port Adelaide/Wakefield/Makin area in South Australia.

Outback Power
This program will provide $10.6 million over four years to service up to 250 existing renewable energy systems in remote Indigenous communities in Western Australia, Queensland and the Northern Territory

Small Business access to Commonwealth Contracts
The budget details funding earmarked to assist small business access government contracts, and assist them to share in the expenditure and infrastructure. This will come in the form of improving processes and guidance material for business to navigate the procurement process that Government use. MEA will be particularly interested in this to assist members engage with new markets and build customers.