​Making sense of the Federal Budget for automotive

Public news

The Morrison Government recently handed down its last budget before the upcoming May 2022 Federal Election. To make sense of what it all means, we have put a handy guide together on the key measures of importance to our automotive industry.

Training and Apprenticeships

  • Wage subsidy extended by 3 months and then replaced

Announced prior to the Budget, but confirmed last night, the Federal Government is committing $365.3 million to extend the generous Boosting Apprenticeship Commencements (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidy scheme to 30 June 2022.

After 30 June 2022, BAC and CAC will be replaced with a new $954 million program called Australian Apprenticeships Incentive Scheme. This scheme aims to support apprentices in priority occupations with $15,000 in wage subsidies and $5,000 over two years for apprentices in an Apprentice Training Support Payment.

  • Small business tax deductions for training and upskilling

To support small businesses to upskill and train their staff, the Skills and Training Boost provides eligible businesses with a new 20% bonus deduction for eligible external training courses. This means for every $100 spent on training a $120 tax deduction can be made.

  • Supporting women to commence trades

The Federal Budget also includes $38.6 million over four years to provide additional support for women who commence a trade for occupations on the Australian Apprenticeships Priority List. The MTA is awaiting further details of this measure to understand whether automotive will be captured.

Tax cuts and fuel relief

  • Fuel excise slashed for 6 months

Calls to reduce the impact of high fuel prices have been answered in this Budget with the Federal Government announcing a 50% reduction in the fuel excise. This means the excise on unleaded and diesel fuels reduces from 44.2c/L to 22.1c/L. The ACCC has also notified petrol station owners they will be watching to see if the reduction is passed through.

  • Cash payments for concession card holders and tax relief continuing

To help ease the cost of living pressures the Federal Government is also providing relief through one-off $250 payments to pensioners and concession card holders, and a $420 increase to the low and middle-income tax offset bringing it to $1,500.

The $250 payment should appear in the next month and the offset will come tax time, putting more money in the pockets of Australians to spend in the economy.

Other relevant programs

  • Big infrastructure spend in the NT

For Northern Territory, the Budget includes $538.7 million for infrastructure projects aimed to upgrade regional highways and roads, specifically the 'Outback Way' and key tourism routes.

  • Supporting businesses to go digital

For small businesses that plan to modernise or digitise their workplaces, the Budget includes a Technology Investment Boost program. This program enables businesses with a turnover of less than $50 million to deduct a bonus 20% of the cost of expenses and depreciating assets that support digital uptake. This applies to expenditures of up to $100,000 and enables businesses to reduce their tax bill.

  • Plastic recycling

The Federal Government is contributing an additional $83.1 million to boost the Recycling Modernisation Fund and National Waste Policy Action plan. $60.4 million will go towards developing new plastics recycling and advanced recycling solutions, and the remainder into an education campaign 'ReMade in Australia'.

If you have any industry-specific questions about the Budget and what it could mean for your business, please contact the MTA's Industry and Government Engagement Manager, Kaes Cillessen at kcillessen@mtasant.com.au or on 8291 2000.