Federal Budget 2020: Budget Highlights pertinent to the Architecture Profession

As expected, the budget contained measures to deal with assisting the business community during the pandemic and stimulating the economy.  Highlights for the architectural professions include:

JobKeeper

• The JobKeeper Payment will provide continued support until 28 March 2021. The level of payment is being tapered to enable businesses to transition towards their longer‑term plans and a two‑tiered payment is also being introduced to better match the Payment with the incomes of employees.

Personal Tax

• There is a permanent cut of $47 a week for high-income earners.
• Middle-income earners will receive a one-off $21 with extension of the low and middle-income tax offset into 2020-21.

• From 2020-21, the upper limit of the 19% personal income tax bracket will rise to $45,000 and the 32.5% marginal tax rate upper threshold will lift from $90,000 to $120,000.

Fringe Benefits Tax — exemption to support retraining and reskilling

• The Government will introduce an exemption from the 47 per cent fringe benefits tax (FBT) for employer provided retraining and reskilling benefits provided to redundant, or soon to be redundant employees where the benefits may not be related to their current employment. This measure applies from announcement

Small business

• Businesses with a turnover of less than $5bn will be able to deduct the full cost of capital assets purchased after budget night and first used or installed by 30 June 2022.
• Small and medium businesses will be able to apply “full expensing” to second-hand assets; businesses earning $50m to $500m will be able to do so for assets of less than $150,000.
• Companies with turnover up to $5bn will be able to offset losses against previous profits on which tax has been paid, to generate a refund.
• Exemptions from the 47% fringe benefits tax employer-provided retraining activities to employees who are redeployed to a different role in the business.
• provide $7.0 million in 2020-21 to support the mental health and financial wellbeing of small businesses impacted by COVID-19 including through a tailored program by Beyond Blue
• A new JobMaker Hiring Credit will be available from 7 October 2020 for each new job businesses create over the next 12 months for which they hire an eligible young person. For each eligible employee, employers will receive for up to 12 months: $200 a week if they hire an eligible young person aged 16 to 29 years; or $100 a week if they hire an eligible young person aged 30 to 35 years subject to certain criteria.

Housing

• $0.6 million over four years from 2020-21 (with a fiscal balance impact of $15.8 million over four years from 2020-21) to boost housing demand and support the residential construction industry
• extending the First Home Loan Deposit Scheme to provide an additional 10,000 guarantees in 2020-21 to allow eligible first home buyers to build a new home or purchase a newly constructed home sooner with a deposit of as little as 5 per cent
• increasing the National Housing Finance and Investment Corporation’s (NHFIC) cap on total guaranteed liabilities to $3 billion to enable the Affordable Housing Bond Aggregator to further support the community housing sector by facilitating institutional investment to provide lower cost loans to community housing providers

Indigenous housing

• The Government will provide an equity injection of $150.0 million over three years from 2020-21 to Indigenous Business Australia for new housing construction loans in regional Australia through its Indigenous Home Ownership Program.

Environment

• The environment and energy budgets include funding for the technology roadmap for reducing Australia’s emissions and $52m for the expansion of Australia’s gas industry.
• Funding for the Australian Renewable Energy Agency (Arena) for a further 10 years from 2022 to a total of $1.4bn.
• The government will spend $249.6m over four years on waste and recycling policies, including $190m for a recycling modernisation fund for new infrastructure to sort plastic, paper, tyres and glass waste and $233.4m to upgrade facilities at national parks.
• The Government will provide $36.6 million over two years from 2020-21 to maintain the timeliness of environmental assessments and undertake further reforms under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

Supporting Business Research and Development

• For small companies, those with aggregated annual turnover of less than $20 million, the refundable R&D tax offset is being set at 18.5 percentage points above the claimant’s company tax rate, and the $4 million cap on annual cash refunds will not proceed.
• For larger companies, those with aggregated annual turnover of $20 million or more, the Government will reduce the number of intensity tiers from three to two.
• The R&D premium ties the rates of the non-refundable R&D tax offset to a company’s incremental R&D intensity, which is R&D expenditure as a proportion of total expenses for the year. The marginal R&D premium will be the claimant’s company tax rate plus:
• 5 percentage points above the claimant’s company tax rate for R&D expenditure between 0 per cent and 2 per cent R&D intensity for larger companies
• 5 percentage points above the claimant’s company tax rate for R&D expenditure above 2 per cent R&D intensity for larger companies.

Women’s economic security package

• $231.0 million over four years from 2020-21 for the Second Women’s Economic Security Package. The package includes:
  • $90.3 million over three years from 2020-21 for concessional work test arrangements for Paid Parental Leave in response to COVID-19.
  • $47.9 million over four years from 2020-21 to increase grants for the Women’s Leadership and Development Program, including funding for the Academy of Enterprising Girls and Women Building Australia
  • $35.9 million over five years from 2020-21 (including $6.5 million in 2024-25) to increase the number of co-funded grants to women-founded start-ups under the Boosting Female Founders Initiative and to provide access to expert mentoring and advice for women entrepreneurs
  • $25.1 million over five years from 2020-21 (including $3.0 million in 2024-25) to establish a Women in Science, Technology, Engineering and Mathematics (STEM) Industry Cadetship program to support 500 women working in STEM industries to complete an Advanced Diploma through a combination of study and work-integrated learning experiences
  • $24.7 million over four years from 2020-21 to streamline the servicing arrangement of ParentsNext and modify the eligibility to provide assistance to parents most in need
  • $14.5 million over four years from 2020-21 to extend or expand existing initiatives that support girls and women to gain STEM skills and capabilities, including the Women in STEM Ambassador, the Women in STEM Entrepreneurship Grants Program and the Girls in STEM Toolkit
  • $2.1 million over three years from 2020-21 to establish a Respect@Work Council to assist in addressing sexual harassment in Australian workplaces.

Modern Slavery

• The Government will provide $10.6 million over five years from 2020-21 for the provision of grants to deliver community-based projects to prevent modern slavery.

Advanced Manufacturing Facility and Vehicle to Grid Trial

• $5.0 million in 2020-21 to establish an Advanced Manufacturing Facility in South Australia to facilitate the manufacturing and assembly of electric vehicles, and for a bi-directional vehicle-to-grid trial in South Australia to examine the concept and operation of systems which support solar home charging, grid services and virtual storage infrastructure.

Manufacturing

• $1.5 billion over five years from 2020-21 to support the Modern Manufacturing Strategy which is focused on building competitiveness, scale and resilience in the Australian manufacturing sector. Investment and support will focus on creating manufacturing strength and capability in six areas of comparative advantage and strategic interest. These six National Manufacturing Priorities are: resources technology & critical minerals processing; food & beverages; medical products; recycling & clean energy; defence; and space.

Infrastructure

• $14bn in new and accelerated infrastructure projects over the next four years in every state and territory.
• $3bn towards shovel-ready projects to support further job creation and economic recovery, including for small scale road safety projects.
• $207.7 million over five years from 2020-21 (including $0.5 million in 2024-25) for round five of the Building Better Regions Fund to support investment in community infrastructure and capacity building projects in regional areas
• Around the country there are a number of JobMaker infrastructure announced initiatives that the Institute has flagged as potentially provide an economic stimulus benefit to the architecture sector. These initiatives were identified by the Institute among larger packages that generally focus on bypass and route upgrades on both road and rail networks and corridors. They include: