Budget Highlights pertinent to the Architecture Profession

This had been billed as a high spending budget and it does contain a range of measures to deal with economic recovery focused on the major effects of the pandemic. More than $53bn in new stimulus payments and funding for key services have been announced to attempt to ensure a COVID-19 recovery, with the prospect of a balanced budget put-off for at least another decade.

The primary focus is on private sector-led growth to create jobs and drive the unemployment rate lower. There is also temporary and targeted support to Australian regions and sectors most impacted by COVID-19.

Major initiatives include:

• $1.9 billion for the COVID-19 Vaccination Strategy
• $1.5 billion to extend a range of COVID-19 health response measures.
• $2.7 billion to extend the Boosting Apprenticeship Commencements wage subsidy
• $1.7 billion to support an increased Child Care Subsidy for families with second and subsequent children aged five years and under
• $1.2 billion to implement a comprehensive Digital Economy Strategy
• $17.7 billion to transform the aged care system
• $2.3 billion for mental health and suicide prevention services
• $13.2 billion for the National Disability Insurance Scheme.
• Programs to improve women’s safety, economic security, health and wellbeing,
• Shoring up Australia’s fuel security.
• $537.6 million to strengthen regions
• $486.3 million to protect our environment
• $1.6 billion to fund clean energy technology

The Economy

The Australian economy has shown resilience in the face of the COVID‑19 pandemic, with the economy expected to have exceeded its pre-pandemic level of activity in early 2021. The unemployment rate is expected to fall to 5 per cent in mid‑2022 before falling further to 4¾ per cent in mid‑2023.

Over the next four years, the deficit is expected to halve. The underlying cash deficit in 2021‑22 is forecast to be $106.6 billion (5.0 per cent of GDP). This is expected to improve over the forward estimates to a $57.0 billion deficit (2.4 per cent of GDP) in 2024‑25 and to a deficit of 1.3 per cent of GDP by the end of the medium term.

The extension of homebuilder timelines is expected to avoid a sharp drop off when government incentives eventually end. It is forecasting 2.5 per cent growth this financial year for dwelling investment before falling flat next financial year and then declining 1.5 per cent in financial 2023. Net overseas migration will fall from around 194,000 persons in financial year 2020 to be around -97,000 persons by the end of this financial year, and then to -77,000 next financial year before increasing to 235,000 people in financial year 2025. This means less demand for housing and associated services.

Budget Highlights

Tax and superannuation

• Retaining the low and middle income tax offset (LMITO) in 2021-22
• Extending the two tax incentives announced in the 2020-21 Budget by one year:
  • Temporary full expensing – allows eligible businesses with aggregated annual turnover or total income of up to $5 billion to deduct the full cost of eligible depreciable assets
  • Temporary loss carry-back – allows eligible companies to carry-back tax losses from the 2022-23 income year to offset previously taxed profits as far back as the 2018-19 income year
• Removing the exclusion of the first $250 of deductions for prescribed courses of education.
• Modernising the individual and corporate tax residency rules
• Allowing taxpayers to self-assess the effective life of certain depreciating intangible assets for tax purposes. This will apply to patents, registered designs, copyrights, in-house software, licenses and telecommunications site access rights
• Giving older Australians, including self-funded retirees, greater flexibility to contribute to their superannuation and access their housing wealth

Housing

• Family Home Guarantee: From 1 July 2021, the Government is providing 10,000 guarantees over four years for eligible single parents with dependents to build a new home or purchase an existing home with a deposit of 2.0% Eligibility includes first home buyers or previous owner-occupier. It is based on previous First Home Loan Deposit Scheme and New Home Guarantee initiatives which have assisted 26,000 first home buyers.
• A further 10,000 first home buyers to be assisted to build a new home with a 5 per cent deposit.
• The amount that can be released under the First Home Super Saver Scheme to increase from $30,000 to $50,000.
• People aged over 60 can contribute up to $300,000 into their superannuation if they downsize their home, to freeing up more housing stock for younger families.
• $774.8 million over two years from 2021-22 for the HomeBuilder program to extend the construction commencement requirement from six months to 18 months for all existing applicants

Low emissions technology

• $565.8 million to establish international partnerships on practical low emissions projects
• $275.5 million to support up to four additional hydrogen hubs
• $263.7 million to accelerate the development of Carbon Capture Use and Storage
• $59.6 million to support a National Soil Carbon Innovation Challenge and trial new agricultural feed technologies that reduce emissions from livestock

Reducing business energy costs and emissions

• $316.7 million to help businesses and industry lower their emissions by supporting more voluntary action and helping businesses reduce their energy use

Environmental protection

• $29.3 million to support timely assessments and improve compliance under the EPBC Act as well as more effectively managing the environmental risks associated with industrial chemicals
• $22.3 million to farmers to protect and restore native habitat
• $9.1 million to help ensure natural assets are valued and taken into account in commercial decisions

Waste and recycling

• The National Waste Policy Action Plan will be supported by $67 million to reduce the amount of food waste going to landfill and improve soil health
• $5.9 million in funding will be provided for a third round of investments in the National Product Stewardship Investment Fund. This fund supports industry to find new ways to recycle products
• Small businesses will be supported to adopt the Australasian Recycling Label. This label is a world-leading consumer education tool which helps households recycle

Disaster preparedness

The Government is investing in making Australia more disaster resilient and improving preparedness, response and recovery in line with the recommendations of the Royal Commission into National Natural Disaster Arrangements through:

• establishing the new National Recovery and Resilience Agency
• enhancing Emergency Management Australia
• providing $209.7 million to establish the Australian Climate Service, enhancing the Commonwealth’s extensive climate and natural disaster risk information to build Australia’s climate resilience

Infrastructure

$15 billion in additional infrastructure commitments including for:

• the North‑South Corridor in South Australia
• the Great Western Highway and Newcastle airport in New South Wales
• the new Melbourne Intermodal Terminal in Victoria
• the Bruce Highway in Queensland
• METRONET in Western Australia
• highway upgrades in the Northern Territory
• Light Rail Stage 2A in the Australian Capital Territory and
• Midland Highway upgrades in Tasmania.
• A further $1 billion in road safety upgrades and a further $1 billion in local road infrastructure projects.
• Building Better Regions Fund, will support a further $250 million of regional community infrastructure projects.