19th August 2024
RSM Australia National Leader – Manufacturing Services, Jessica Olivier:
Rather than the manufacturing sector as a whole, the Budget focused on Critical Minerals, Clean Energy and Green Technologies, however it was pleasing to see the announcement of $500m for the tertiary sector to increase skills in manufacturing and clean energy, as well as the announcement of various initiatives to lift private investment and workforce skills, and boost local supply chains.
Beyond that announcement and as expected, we saw the Federal Government set out their agenda for the recently announced Future Made in Australia Act and highlight their priorities by focusing investment on transformational opportunities.
Last year’s $15b National Reconstruction Fund has been rolled into the Future Made in Australia policy, which on a positive note saw a 51% increase in the overall funding allocated to Future Made in Australia totalling $22.7b.
This also included “picking winners” such as the $1 billion for the Solar Sunshot production of solar panels in the Hunter Valley and $1 billion to build the world’s first fault-tolerant quantum computer in Brisbane, along with $840 million for Arafura’s rare earth metals production in the NT. WA will be the primary beneficiary of the $566m allocated to GeoScience Australia to map what is under Australia’s soil and seabed to uncover mineral deposits for critical mineral processing.
We also saw the Government demonstrate their commitment towards a cleaner, greener future in Australia with funding towards green energy, critical minerals and renewables in Australia – in particular $13.7 billion in production tax incentives for green hydrogen and processed critical minerals.
In terms of grants (both new and extended programs), it should have been a significant part of the new measures announced to bolster manufacturing, however there was little specifically targeted at this sector. In relation to other incentives and over 8 years since Finkel-Ferris-Fraser 2016 review of the R&D Tax Incentive program, the Budget announced it would undertake an independent and strategic examination of Australia’s Research and Development system to strengthen its alignment with Australia’s priorities and improve innovation and research and development outcomes.
Tax breaks were announced and highly anticipated per Budget night; this was ultimately an extension of the $20,000 instant asset write-off for small business extended by 12 months until 30 June 2025.
In general, I would agree with the Treasurer that Australia’s approach to renewables investment did need to change to prevent the economy from becoming more vulnerable.
It is welcome to see moves to both support and streamline regulatory approvals for the Future Made in Australia agenda, as well as allocating funding for international investment to encourage collaboration with industry, investors and major stakeholders .
This should attract and facilitate major investment – manufacturers will welcome that.
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