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CA ANZ welcomes some Budget progress but still awaits substantive tax reform 

BUDGET REACTION – Chartered Accountants Australia and New Zealand (CA ANZ) will continue to push for substantive tax reform and a roadmap to achieve it, despite welcoming aspects of the latest Federal Budget.

CA ANZ used its pre-Budget submission to push for a wider discussion about the tax system, the heavy reliance on personal income tax collection and the need to consider the equity of the tax system – especially intergenerational equity – to help support the costs of an ageing population.

“The structural deficit means it’s well and truly time to discuss the sustainability of Australia’s heavy reliance on personal income tax collections,” CA ANZ CEO Ainslie van Onselen said. “We again urge policymakers to keep an eye on the international competitiveness of our personal tax system.

“That said, following our calls for well-resourced and better targeted regulatory activity outside our remit as a membership body at numerous parliamentary inquiries, I am pleased to see that ASIC staff will be increase by 14 percent, or 239 people.

“This is an important development as it’s in the best interest of the auditing and accounting professions to have a strong, well-funded regulator but CA ANZ will be looking for more information on exactly where within ASIC, these additional employees will go,” Ms van Onselen said.

Small business support 

CA ANZ’s senior tax advocate, Susan Franks said she welcomed the extension of support for small businesses but remains concerned at the growing list of announced but un-enacted tax measures.

“Small business clients keep asking Chartered Accountants obvious questions: why keep tinkering with the instant asset write-off and why not make it permanent?” Ms Franks said.

“It is disappointing that the government has not continued the 120 percent boost for training and the transition to energy efficient assets for small business when there is a large need for trained staff and for all businesses to reduce their carbon footprint,” she said.

CA ANZ is calling for the Federal Gvernment to legislate this and other changes as a matter of urgency.

“The extension of the instant asset write-off in last year’s budget and the 120 percent boost for energy efficient assets are still languishing before Parliament,” Ms Franks said. 

“Small business owners or sole traders who may want to take advantage of these measures are holding back until they have certainty that their investment will receive the benefits they’ve been promised. 

“There is clarification of some announced but un-enacted measures in the Federal Budget but the list remains long. This Budget adds further uncertainty about changes to the capital gains tax treatment of inbound investment.

“Creating a new ‘front door’ for investors with major investment proposals to make it simpler to invest in Australia won’t be as effective as it should be if there is an uncertain tax regulatory environment,” Ms Franks said. 

More money for the ATO  

This year’s Federal Budget also includes another funding boost for the Australian Tax Office (ATO). 

“Ensuring the integrity of the tax system is essential to the maintenance of Australia’s high level of tax compliance and providing a level playing field for businesses doing the right thing,” Ms Franks said.

“In the wake of the Operation Protego scandal, combatting fraud is the tax centre piece of this Budget.

“Businesses expecting fast business activity statement refunds may be in for a shock. The ATO has been given the power to retain those refunds for 30 days, rather than the current 14 days, to give the ATO time to ensure that its systems are appropriately preventing fraud.

“While the ATO has been allocated extra resources, the Inspector General of Taxation and Taxation Ombudsman (IGTO), the key agency which helps taxpayers deal with the monolithic ATO, has not received any significant additional funding.

“With taxpayer disputes with the ATO likely to escalate as the ATO commences the huge job it faces in collecting $100 billion of outstanding tax debt, it is concerning that the IGTO has not received a significant funding boost and the outgoing IGTO has not been replaced,” Ms Franks said.

A quiet night on the superannuation front 

CA ANZ had used its pre-Budget submission to push for a plan for the ageing population, including replacing the annual superannuation caps with lifetime caps. 

CA ANZ’s superannuation and financial services leader, Tony Negline emerged from the Budget lock-up with this view:

“The Federal Budget is very quiet on a superannuation and financial advice perspective,” Mr Negline said.

“The government’s decision to provide $1.1 billion to pay super on government funded parental leave over four years, then $623 million every year after, is an important to step to an equitable superannuation system. The retention of the deeming rates at current levels for another 12 months will assist part-pensioners struggling with the inflationary impact on basic living costs,” Mr Negline said.

“A roadmap towards long-term sustainable simplification of the superannuation, age pension and aged care regulatory environments remains a task yet to be started.”  

www.charteredaccountantsanz.com 

 

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CDU welcomes decision on 'prac payments' to support students during work placements

BUDGET REACTION – Charles Darwin University (CDU) has welcomed the Federal Government’s decision to bring in paid placements for certain study areas, including in regional and remote areas, as it will help northern Australia’s essential worker crisis. 

The benefit of paid placements for regional and remote communities in improving workforce numbers was a key reason that the recommendation was in the university’s submission to the panel developing the University Accord.  

The decision will mean students studying teaching, nursing, midwifery or social work will receive a Commonwealth Prac Payment of $319.50 per week during their clinical and professional placement periods. 

CDU acting vice-chancellor, Reuben Bolt said this support was a welcome addition given the financial pressures many students face.

“One of the major hurdles we find when it comes to students completing their studies in crucial areas such as nursing, allied health and teaching is the successful completion of student placements,” Professor Bolt said. 

“Many students, particularly those from low socio-economic areas need to pause or give up paid work or even relocate to complete the required placement hours. Some must choose between filling their car with petrol in order to travel to their placements or having enough food for the week.

“The Commonwealth Government establishing a Prac Payment to support students will help ease cost-of-living pressures for our students and we are incredibly happy that the government has taken the advice of the Universities Accord,” he said.

Professor Bolt said having paid placements will help encourage students to study these professions, which are much needed in the Northern Territory.

“We know that teachers and health workers are incredibly needed here in the Territory and having paid placements and support for students will hopefully encourage more students to undertake these study pathways,” Prof. Bolt said.

“When students undertake work placements, they learn job and social skills, it helps them to decide on what career path they wish to choose and also boosts their chances of getting a job once they finish their studies.

“While this Prac Payment is most definitely a great start, we do want to see more study areas included to ensure all students have an equal opportunity to enter their chosen area of the workforce,” he said.  

The Australian Universities Accord final report was released in February and contained 47 recommendations for government to consider. The recommendations focused on creating a long-term plan for the higher education sector to meet Australian’s future skills need.  

The Federal Government payment will come into effect on July 1, 2025, and will be in addition to any income support a student may also receive.

www.cdu.edu.au

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This Budget won’t help productivity, skills gap, or made-in-Australia future

BUDGET REACTION – Australian CEO and author, Jarrod McGrath has slammed the 2024 Budget for doing “nothing to help fix our stifling productivity, growing skills gap, or ensure a future made in Australia”.

Mr McGrath, who founded and heads up Smart WFM – a global workforce management (WFM) and human capital management (HCM) consultancy – said successive governments had made an already complex industrial relations, union, and payment system more complicated, “to the point that it’s become too hard to correctly pay people”. 

He said political leaders had avoided investing in, or even discussing, this issue as “it’s not easy to fix and frankly, worryingly, most of them don’t understand it”.

“This Budget will do nothing to help fix our stifling productivity, growing skills gap, or ensure a future made in Australia,” Mr McGrath said. 

“The worker carries this country. My Dad’s Dad was a boiler maker, jumping into fire boxes, often while still trying to keep steam trains running.

“Dad was a motor mechanic. My friends were mostly tradies. From these roots, this country grew along with a complex industrial relations (IR), union, and payment system that successive governments have made more complicated,” he said.

“Today we live and work in tech-driven knowledge economy underpinned by our history and any Budget and government activity must acknowledge this. If we are truly going to have a future made in Australia, we need to simplify the complexities that make it so difficult to correctly pay people.

“If the government really wants Australia to lead the world on green energy, it has to make it easier for budding green energy entrepreneurs to get the right people in place,” Mr McGrath said.

“We need to seriously invest in technology and simplify the complex systems that inhibit its use to drive productivity and efficiency.

“Political leaders have avoided this for years because it’s not easy to fix and frankly, worryingly, most of them don’t understand it.”

www.smartwfm.com

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What does Federal Budget 2024 mean for development, education and employment across industry sectors and initiatives?

BUDGET REACTION -- from Wendy Perry of Workforce Blueprint >>

YOU WATCH THE TREASURER Jim Chalmers MP on the ABC deliver his budget speech, scan the relevant documents (budget paper #2 is the key), and draw some conclusions based upon the language, slogans, what has led up to today with various announcements, and what you know about the longer-term potential approaches being considered.

Jim and Treasury friends believe that the unemployment rate will go up to around 4.5% (unsure of the timeframe) and I [picture in this article is from Budget 2024 afternoon] believe that a % with a 3 in front of it is too low for our economy and employers to function – I’d suggest an average rate of around 4% can work noting that this varies wildly across the country.

Read this blog I wrote in February 2022 – What will Unemployment Rates With a 3 in Front of it do for Labour and Skills Shortages in Australia?

Take what makes sense for you from this summary focusing on economic development, education, employment services and entrepreneurships, higher education, industry and regional development, social enterprises, startups and scaleups, VET and working with specific cohorts. 

There is more cross correlation between portfolios so you might say that makes it more integrated, or others might think it can hide where funds are going from and to.  For each area I’ve chosen the items that might make a difference to you, your business/organisation and your work.

Here we go starting with – Education (schools), where there is support for student wellbeing and piloting new approaches to managing teachers workload, promotion of defence industry career paths, consent and respectful education, on country learning and support packages for First Nations students.

Skills (TAFE) has more fee free places, turbocharging (this is the term used by the Australian Government) teacher, trainer, and assessor workforce (sounds very familiar), TAFE Centres of Excellence supported by a National Network.  TAFE Technology Fund for areas such as electric vehicles, green energy, cyber security, and the pipeline of skills for building and construction with pre-apprenticeships (another program from the past).

Higher education (HE) gets a fair focus with wiping of student debt/loans (reasons range from people being able to borrow for property to chasing some of these debts is a waste of time and money), capped places for international students linked to providers having accommodation and housing for them, addressing gender-based violence in HE, and payments for pracs in health and education.

A goal of 80% of the Australian working age population having a tertiary qualification by 2050.  And funding to progress harmonisation, which I think means one regulator for the tertiary sector in Australia – higher education and VET combined by around 2028; also linked to a National Student Ombudsman for the sector.

There is a new $100 million Outcomes Fund could be interesting supporting place-based strategies in skills and employment, without much detail, but with an equity and gender lens.  There’s $54 million for two new paid work placement programs (Real Jobs, Real Wages and Work Foundations) for job seekers with barriers, and Regional Workforce Transition Plans but lacking information on the purpose.

Not sure if I’m reading it right but looks like incentives for many Australian Apprenticeships disappear from particular industry sectors and job roles, focusing on areas with acute – significant skills – and labour shortages.

Disability Employment Services reform and replacing, current employment which seems to wrap up a number of items, and a kind of vague-ish employment and workplace relations reprioritisation.

Language of ‘Getting the NDIS back on track’ where the spend on fraud detection is similar to the savings – I’ll leave others in the sector to comment on how that might go; and I’m not going to comment on migration either.

Access and equity, support for First Nations people, women, people with disabilities and people from Culturally and Linguistically Diverse (CALD) background have various measures across multiple portfolios.

Opportunities are in:

  • Net Zero, Clean Energy, Hydrogen
  • Housing, Building and Construction (domestic and not so much large infrastructure projects bar things we already know about)
  • Defence, STEM industries, shipbuilding, nuclear-powered submarines
  • Early Childhood Education and Care sectors, Health
  • Promoting TAFE and VET Pathways (yes that old chestnut!) to drive demand for VET but the products will need to be much better and more future job focused
  • Australia-France Roadmap (need to brush up on my French)
  • Water and Snow Safety Program
  • support measures for Women ($55.6 million investment in the “Building Women’s Careers” program)
  • Future Made in Australia – Workforce and Trade Partnerships for Renewable Energy Superpower Industries which seems like some reallocation from the National Reconstruction Fund but that is just my take on it.

Nothing really for small business, so perhaps lobbying here needs to be stepped up with evidence and examples, as there are industry sectors like hospitality doing it really tough in certain places.

On Employment, Jobs and Skills Australia and the National Careers Institute are okay with the progression of the five-year National Skills Agreement, and a few new items such as First Nations Prison to Employment Program (voluntary), National Indigenous Employment and Training Alliance to operate as a First Nations employment services peak body, Energy Industry Jobs Plan, and the Remote Jobs and Economic Development Program.

A line gets put through and savings for Employment come from:

  • • $47.3 million over five years from 2023–24 (and $11.1 million per year ongoing) by ceasing the Harvest Trail Services and Harvest Trail Information Service programs from 30 June 2024.
  • • $6.1 million over five years from 2023–24 (and $1.2 million per year ongoing) by ceasing the International Skills Training Courses program from 1 April 2024.
  • • $4.7 million in 2023–24 by reducing the number of grants issued in the second stage of the Automatic Mutual Recognition of Occupational Registrations scheme under the Business Research and Innovation Initiative.
  • • $58.8 million over five years from 2023–24 (and $14.0 million per year ongoing) from ceasing the Workforce Specialists initiative.
  • • $53.9 million over four years from 2024–25 (and $17.7 million per year ongoing) from reducing credits to the Workforce Australia – Employment Fund by $100 for each new participant to Workforce Australia Provider Services.
  • • $27.0 million over five years from 2023–24 (and $6.6 million per year ongoing) from reducing credits to the Workforce Australia – Employment Fund by $50 for each new participant to Workforce Australia Online.

Well that is a first take, not massively exciting, maybe the last budget before a federal election? I’d put a bet on to say ‘yes’ if I was pushed, but let’s wait and see.

This email address is being protected from spambots. You need JavaScript enabled to view it.

www.workforceblueprint.com.au

 

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Advance Cairns says Budget offered ‘slim pickings’ for the region

BUDGET REACTION – Advance Cairns has reported that while the 2024-2025 Federal Budget was big on national initiatives, it was short on specific commitments to Cairns and Far North Queensland.

Advance Cairns, the leading independent economic development and advocacy organisation in Far North Queensland, said while the Budget introduced welcome measures to address cost-of-living pressures and skills shortages in regional Australia, it failed to deliver on key projects such as the Cairns Water Security project.

“We are hard pressed to find any demonstrable new investments in what is Northern Australia’s most populated region, which is deeply disappointing,” Advance Cairns chair, Nick Trompf said. 

“We will continue to push for additional funds to support Cairns Water Security Project Stage 1, which is a vital piece of infrastructure. Without these additional funds to meet the rising construction and materials costs, this project will in fact add to further cost-of-living pressures for all Cairns ratepayers.

“We will continue to support council’s efforts to generate understanding of the cost levers which have resulted in widespread infrastructure build hikes across the nation. Cairns Regional Council is certainly not unique across Australia in facing major construction cost rises.

“We are hopeful that the door remains open to increased funding of this important initiative and we will continue to push for this critical investment,” Mr Trompf said.

The Budget also did not address a range of other initiatives in the Advance Cairns submission including:

  • Roads projects of $106m for Savannah Way, $30m for the Kennedy Developmental Road and $20m for a study into alternative routes to the northern Tablelands;
  • Establishing an ‘Office of the Pacific’ in Cairns;
  • $500,000 per year in recurrent funding for five years for COUCH Wellness Centre in Cairns;
  • and $12m for further upgrades to the city’s three shipyards.

Mr Trompf said the Budget included $14-$18bn over the next 10 years for defence infrastructure to create what is described as a ’logistically connected and resilient set of bases, ports and barracks across Australia’s north’.

“This might have implications in key assets such as HMAS Cairns, the Cairns Marine Precinct and the Scherger Air Force base, near Weipa,” Mr Trompf said.

CEO of Advance Cairns Jacinta Reddan said while the lack of direct investment in the region “was incredibly disappointing” there were some areas for optimism. 

She said Advance Cairns welcomed the investment in the Future Made in Australia initiative, recognising its potential to stimulate the region’s economy and result in jobs growth.

“We are encouraged by the opportunities, particularly in onshoring advanced manufacturing in the clean energy and renewables sector,” Ms Reddan said.

“We are also keen to better understand how the commitment of about $41 million over two years to fast-track Nature Positive reforms will benefit Far North Queensland. This initiative holds promise for our region, as it aims to attract private investment in nature regeneration and restoration – assets our region has in abundance.

“We also welcome critically needed reforms to the EPBC (Environment Protection and Biodiversity Conservation Act 1999) and look forward to learning more about how this can improve the current opaque approvals process,” she said.

In addition, Advance Cairns welcomed the Budget’s support for apprenticeships, particularly those in regional Australia, as well as initiatives to grow the construction workforce and boost housing supply.

“We are particularly pleased to see the extension of the Approved Destination Status regime for visitors from China, building a strong foundation for the return of the China group travel market,” Ms Reddan said.

“As always with Budgets, the devil is in the detail and we look forward to drilling down into more information about the specific implications for our region,” she said.

www.advancecairns.com

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Budget apprentice and trainee incentives welcomed by ITECA

BUDGET REACTION – The 2024 Federal Budget’s investment to support the employment of more apprentices and trainees has been welcomed by the Independent Tertiary Education Council Australia (ITECA), the peak body representing independent skills training, higher education, and international education providers.

The Australian Government is providing an additional $265.1 million over four years in financial support for apprentices and their employers.  Under the Australian Apprenticeships Incentive System, apprentices and employers in priority occupations will receive an extra $2,000 and $1,000 respectively.

“This additional funding is welcome and will help aspiring apprentices and trainees plus their potential employers,” ITECA chief executive, Troy Williams said. 

Under the revised system, from July 1, 2024, employers taking on apprentices training in priority occupations will be eligible to receive an additional $1,000 – $5,000 in total – in incentive payments, to help subsidise costs associated with employing an apprentice. 

Further, apprentices undertaking training in priority occupations will be eligible to receive an additional $2,000 – $5,000 in total – in incentive payments, to assist with cost-of-living pressures and support them to finish their training.

“From construction, mining, health and hospitality the Australian Government’s investment will help more people not just into a job, but into a career,” Mr Williams said.

Apprentice payments will be restructured to be frontloaded, with apprentices receiving $3,500 in the first year and $1,500 in the second year. This will provide more assistance to apprentices when they need it most.

Employers can receive up to $5,000 in the first year. Payments will be paid over two instalments, with $2,000 at six months and $3,000 at 12 months.

“The approach of the Australian Government looks to support apprentices and trainees throughout their studies has merit,” Mr Williams said.

Some employers have queried whether the additional amount will make much of a difference when it comes to apprentice and trainee recruitment and retention. 

ITECA noted the Australian Government had a report –  the Strategic Review of the Australian Apprenticeship Incentive System –  underway that would investigate the support available to help more people start and complete apprenticeships and traineeships.

“ITECA looks forwards to ensuring that our members’ views are taken into account as this review makes its recommendations to the Australian Government,” Mr Williams said.

Independent Registered Training Organisations support 50.9 percent of the 365,420 apprentices and trainees in training as at September 2023 accord to the National Centre for Vocational Education Research (NCVER).

www.iteca.edu.au

 

Fast facts

From July 1, 2024, employers taking on apprentices training in priority occupations will be eligible to receive an additional $1,000 ($5,000 in total) in incentive payments, to help subsidise costs associated with employing an apprentice.

From July 1, apprentices undertaking training in priority occupations will be eligible to receive an additional $2,000 ($5,000 in total) in incentive payments, to assist with cost-of-living pressures and support them to finish their training.

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Critical minerals support welcome but government policies must deliver for all resources - QRC

BUDGET REACTION - THE Queensland Resources Council (QRC) has welcomed initiatives in the Federal Budget that promote exploration and investment in critical minerals projects but says policies must encourage and attract investment right across the resources sector. 

QRC chief executive officer, Janette Hewson, said a number of the Budget initiatives would support the emerging critical minerals sector in Queensland. 

“The Critical Minerals Production Tax Incentive, funding to progress common user facilities and $566 million to Geoscience Australia to develop new data are all important announcements that will benefit our critical minerals industry,” Ms Hewson said. 

“As announced last month, the Budget also confirmed a $400 million loan to Gladstone-based Alpha HPA to deliver Australia’s first high-purity alumina processing facility in Queensland.”   

Ms Hewson said the resources sector remains the shining light for the national economy as Australia faces economic headwinds at home and internationally and all levels of government need to focus on policies that attract investment in all commodities. 

“The resources sector is proud of its significant contribution to Australia’s economic security through taxes, royalties and jobs, and the QRC urges governments to focus on policies that encourage the essential private investment required to develop projects that benefit all Australians,” Ms Hewson said. 

“In Queensland, coal, gas and minerals producers contributed a record $116.7 billion to the state’s economy in the 2022/23 financial year. 

“This contribution includes nearly $33 billion spent by resources companies purchasing goods and services from local businesses, particularly in regional Queensland. 

“The Queensland resources sector is also helping with cost-of-living pressures for more than 530 thousand Queenslanders whose jobs are supported by the resources sector, including 61,000 directly employed in an industry with the highest average income in Australia.

“This budget underlines the importance of keeping the resources sector strong,” Ms Hewson said. 

“It is more important than ever that there is policy consistency and stability at both the State and Federal level to give investors the confidence to go ahead with new projects and jobs. 

“Communities across Queensland and Australia rely on a strong resources sector.” 

www.qrc.org.au

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