THE COVID-19 pandemic has created many unusual outcomes. One of those was the delay of the May 2020 Australian Federal Budget until October 2020 which included a series of measures aimed at management of the economy in the face of the Pandemic and forecasting future deficits.
The 2021-2022 Federal Budget released Tuesday evening (11 May 2021) included an update on the state of the economy since the predictions of the 2020-2021 Budget.
In general terms, the Federal Budget continues the anticipated focus on spending by the Federal Government in sectors such as transport and infrastructure projects (including a contribution to the new Victorian Intermodal terminal to connect to the internal rail system) and the extension of the full immediate deduction for the cost of acquiring business assets.
At the same time, the Budget recognises some of the issues highlighted by the pandemic and seeks to support them through the continued provision of the childcare subsidy and new investments in aged care and mental health support.
However, for those in the customs, trade and transport industry, some of the main outcomes include the following items.
- Confirmation on the recently announced funding of $411.4 million in support for the biosecurity system and protection of the agricultural industry. This includes new spending aimed at facilitating the import supply chain and reducing the regulatory burden on importers. This follows previous expenditure to support agricultural exporters.
- Additional funding of $37.4 million over three years to provide ongoing support to “modernise” the Australian trade system. No doubt some of this funding will be allocated to support the much anticipated “Single Window for Trade”. The details on the rest of the spending will be of great interest to industry which is currently engaged on a variety of “trade facilitation” initiatives being conducted by government agencies and departments.
- An additional $5 million for the Anti-Dumping Commission to “streamline and reform” our incredibly complex anti-dumping regime for business. Hopefully, this will include the reform package proposed by industry to government years ago which has yet to be actioned by government.
- Continued funding of $118.2 million to provide the International Freight Assistance Mechanism until the end of September 2021. This has proved to be of real support to industry to manage the absence of international airfreight.
- $198.2 million over four years to assist export diversification and growth include funding for WTO reform together with $20.1 million to deliver a Global Resources Strategy to specifically support the diversification of Australia’s resource export market.
- An expansion to the Excise Refund Scheme from 1 July 2021 that will deliver $225 million of tax relief to eligible brewers and distillers. This will be achieved through the increase to the refund level to $350,000. This has the consequence that brewers and distillers will be entitled to the same benefits as those using the WET Producer Rebate.
- There will be an increase in the heavy vehicle road user charge from 25.8 cents per litre to 26.4 cents per litre from 1 July 2021 increasing excise revenue by $73 million over four years.
See the forthcoming June edition of the DCN Magazine for Andrew Hudson’s detailed analysis of budget implications for industry.