| Media item | |
| | Budget Roundup: "Little to fuel growth" | GoAuto News,
Sandringham
by Neil Dowling
| 22 May 2024 | | General News - Page 21 - 1550 words - ID 2073495819 - Photo: Yes - Type: News Item - Size: 1290.00cm2 | |
Pitcher Partners summary sees businesses needing to fend for themselves
INDUSTRY analysts at Pitcher Partners, in their overview of the federal budget, said it "will do little to fuel investment or growth".
In its report, Pitcher Partners said confidence was also not going to be helped by the forecast that wage increases are to exceed CPI across the forward estimates.
"Unemployment is predicted to remain flat the only positive for business lies in the forecast reduction of inflation, which is expected to settle at 3.5 per cent this financial year before falling into the 2-3 per cent band sought by the RBA from 2024-25," it said.
"Apart from some minor other measures, that's the extent of any largesse for business. GDP is expected to bounce between 1.75 and 2.75 for the next five years, and this budget will do little to fuel investment or growth."
On a cautionary note, it said the "sleeper issue" for business will be access to labour a challenge that is not unfamiliar to business, but which has not attracted huge attention in the lead-up to the budget.
"The budget forecasts indicate that overseas migration will reduce by 110,000 people over the forward estimates from July 1, 2024.
"While almost 80 per cent of the permanent migration program will be allocated to skilled visa categories, the number of inbound workers will be significantly restrained.
"On the other hand, the tax cuts are forecast to be a net positive for labour supply, with the government anticipating 930,000 extra hours worked a week, equivalent to 25,000 full-time jobs, as women and individuals on low-to-middle incomes increase their participation." Pitcher Partners said that while productivity has grown in the last two quarters "and is expected to continue to as economic conditions improve, it remains a key concern for middle market business leaders, as revealed in our latest Business Radar survey in February 2024".
In the survey, 52 per cent of business leaders said they are extremely or very concerned about the levels of productivity in their business.
"It remains to be seen whether the federal budget will deliver changes to sustain this trend," the report said.
"Ultimately delivering policy to support productivity improvement is a better way to repay debt and balance the books than introducing new taxes."
For business it was a case of another year, another set of missed opportunities for business investment or visionary government policy to transition the Australian economy.
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In its summary, Pitcher Partners said the small business instant asset write-offwill be extended for another year and is capped at a very modest $20,000, for businesses with turnover of less than $10m.
"As the legislation for a similarly modest amount last year remains stalled in Parliament, with just six weeks to go to the end of the financial year, it is unlikely to get business investment engines revving," it said.
"A million smaller businesses can expect an energy rebate of $325 on their electricity bills throughout the year, but that is roughly half the payment of last year.
"In contrast, the average annual electricity bills for business increased nationally by $540 between October 2022 and October 2023, according to Energy Consumers Australia." AADA says changes welcome The 2024-25 federal budget, dismissed by some industry bodies as lacklustre and missing some key incentives for economic growth, has at least won favour from the peak body representing franchised new car dealers.
The Australian Automotive Dealers Association (AADA) said it contained some "welcome measures for our industry".
AADA CEO James Voortman said these measures included $60 million for the dealer charging fund which he said will help new car dealers with installing EV charging infrastructure in their businesses in support of the transition to selling and servicing electric vehicles.
In addition, the budget announced $3 million to implement the government's response to the Review of the Franchising Code of Conduct, which will be used to investigate the feasibility of a licensing model and remake and update the code prior to its expiration in April 2025.
"These are important investments in supporting Australian new car dealers as employers of over 61,000 people, particularly as we head into a period of unprecedented structural change in the industry," said Mr Voortman.
"While the AADA would have liked to see a resurrection of the previous scheme, we welcome the 12-month extension of the current small business instant asset writeoffscheme."
In contrast, he said the budget highlighted the continuing impost on Australian drivers through automotive taxes such as the luxury car tax and passenger vehicle tariff.
He said the government is estimated to collect almost $1.7 billion this financial year from these two taxes alone.
"We consider these to be outdated taxes, which are a relic from an era when Australia manufactured vehicles here," Mr Voortman said.
"Particularly the luxury car tax
which often applies to more efficient vehicles and applies to optional features which discourage consumer uptake of safety features."
Mr Voortman said these figures highlighted recent calls made by the AADA for Australia to embrace a comprehensive review of automotive taxes, particularly as it seeks to accelerate the uptake of EVs and low emissions vehicles.
VACC says it is a significant budget for auto industry The 2024-25 federal budget is one of the most significant for the retail auto sector in recent years, with benefits including the imminent rollout of New Vehicle Efficiency Standard (NVES) and anticipated rise in EV uptake.
The Victorian Automotive Chamber of Commerce said the budget recognises the transitional support the auto sector needs to adjust to a changing business environment.
"From support for skills and training to funding for EV charging infrastructure and new training facilities, the budget represents a win for our members," it said.
"This outcome is the culmination of efforts by the MTAA and state/ territory MTAs both of which undertook intensive engagement with the government in the lead up to the NVES finalisation as well as this budget, participating in more than 60 meetings this year alone.
Continued next page "While the government has not responded to all of our requests, this budget is a good start and we will continue to engage with the aim to secure our outstanding asks over the
Continued from previous page coming months."
The VACC highlighted automotive sector announcements in the budget. These included: . $84.5m to implement the NVES and establish a regulator to administer the NVES, including capturing emissions data, establishing a credit trading platform and undertaking monitoring and compliance activities . $3m for Franchising Code of Conduct changes, including by investigating a licensing model and remaking and updating the Franchising Code of Conduct before it ceases in April 2025 . $50m for New Energy Training Facilities. Capital and equipment investment fund to be established for facility upgrades to expand clean energy training capacity for a range of energy sectors as well as key electrical and construction trades . $60m EV Charging Fund to help automotive businesses install EV chargers on their premises . New Energy Apprenticeships Program expanded. More apprentices and employers will be eligible for grants and wage subsidies from June 1, 2024. If eligible, an apprentice can receive up to $10,000 during their apprenticeship. An eligible business can receive a wage subsidy of: 10 per cent of apprentice wages for the first 24 months (up to $1500 per quarter); five per cent of apprentice wages for the third 12-month period (up to $750 per quarter), with eligible apprenticeships to include automotive electricians, motor mechanics and vehicle body builders among others.
$1500 reimbursement for Group Training Services. Support for small and medium businesses taking on clean energy apprentices through access to Group Training Organisation services, with up to $1500 in annual reimbursements over the life of an apprenticeship. $265.1m for additional Australian Apprenticeships Incentive System support where apprentices training in priority areas will be eligible for an additional $2000 ($5000 in total) to assist them to undertake and complete their training. Support for SMEs in this year's budget is limited with only a modest set of initiatives. These include the instant asset writeoffextended until June 30, 2025, allowing businesses with a turnover of less than $10 million to claim $20,000 from eligible assets; and an Energy Bill Relief Fund will provide $325 energy rebates to one million businesses on small customer electricity plans to help cover their electricity bills.
. Tariffs abolished from July 1, 2024. The government will abolish 457 nuisance t a r i ffs to simplify Australia's trade system and cut compliance costs for businesses.
MTAA sees upside for auto industry MTAA chief executive Matt Hobbs said the government recognised the importance of assisting the automotive sector as Australians begin the transition to electric vehicles.
He said the budget commitment of $60m for chargers at retail automotive premises was an important first step in getting dealers and repairers EV ready while driving private investment in the sector.
In parallel, the $84.5m fund to implement the NEVS with a new regulator and platform to administer the scheme will ensure the needs of the sector and government are met in a changing industry environment.
"The MTAA has consistently advocated for assistance to prepare its members for the transformation taking place in the automotive sector, and the Australian government has listed," Mr Hobbs said.
Caption Text:
James Voortman
Matt Hobbs
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