Consult Australia is delighted to announce that the Federal Budget includes the formal establishment of a Centre for Procurement Excellence, which was a core recommendation in our pre-budget submission and a central part of our better procurement policy and advocacy work. The Centre's aim will be to enhance procurement capability and productivity across the public sector.
Our pre-budget submission also highlighted the need to invest in the quality of STEM teaching. The budget includes provision for $22.2m over five years from 2018-19 for initiatives to support improved student achievement and to build the capacity of teachers. This funding includes $9.5m over four years from 2019-20 to strengthen the capacity of teachers across Australia to teach mathematics and phonics through the delivery of online teaching and learning resources.
Consult Australia's 2019/20 pre-budget submission is available here.
For more information on the Federal Budget and its impact on Consult Australia members, contact Nicola Grayson or James Robertson.
ECONOMIC AND TAXATION ANNOUNCEMENTS
A $7.1bn surplus expected in 2019-20, up from $4.1bn expected at the Mid-Year Economic and Fiscal Outlook (MYEFO), the first surplus since 2007-08. Revenue in 2019-20 is forecast to be stronger than previously expected due to a boost in company tax receipts.
Economic growth has been revised down with forecasts cut to 2¾ per cent in 2019-20 and 2020-21, down from 3 per cent at MYEFO. The global economy has lost some momentum while housing market developments are contributing uncertainty to the economic outlook.
Household demand is weaker than initially thought and Budget forecasts have been revised down in line with those published by the Royal Bank of Australia. While the fundamentals of the Australian economy remain sound, there are areas of weakness with dwelling investment down and weaker than anticipated household demand. The unemployment rate is expected to remain at around the lowest levels seen since 2011 while labour force participation is expected to remain near record highs.
INFRASTRUCTURE INVESTMENT PIPELINE
The headline announcement in the budget is a $25bn increase of the infrastructure investment pipeline over the next 10 years, from $75bn to $100bn. Much of this commitment is beyond the four-year forward estimate years included in the budget.
Some of the key infrastructure investment commitments included in this year's budget papers are below. Consult Australia will continue to review these announcements to determine new funding announcements from these budget measures.
• An additional $3bn from 2019-20 for the Urban Congestion Fund to support projects, improve traffic safety and flow, and increase network efficiency for commuter and freight movements in major urban areas. This includes $500m for a National Commuter Car Park Fund.
• Additional funding of $2.2bn from 2019-20 to improve local road safety and provide upgrades of local roads, including an additional $1.1bn for the Roads to Recovery Program, $550m for the Black Spot Program, and an additional $275m for the Bridges Renewal Program.
• An additional $1bn from 2020-21 for the Roads of Strategic Importance initiative.
• $1bn from 2020-21 for improvements to the Prices Highway in NSW, Victoria and SA, informed by the Princes Highway Corridor Strategy.
• $206.2m from 2019-20 for a further round of the Building Better Regions Fund to support investments in community infrastructure projects in regional areas, increasing the total funding provided to $841.6m.
• $102.8m from 2019-20 to establish the Regional Airports Program that will provide grants to upgrade infrastructure and deliver safety and access.
• $89.3m from 2019-20 in additional funding for projects under the Community Development Grant Programme.
• $44m from 2019-20 for strategic business cases to identify upgrades to improve the standard of regional rail networks.
• $38.5m from 2019-20 on improving road safety, including $5.9m for the establishment of the Office of Road Safety and $12m for a Road Safety Innovation Fund to support the development of new road safety technologies and products.
• $26.8m over two years from 2019-20 for the Stronger Communities Programme, providing funding for small capital projects that deliver social benefits for local communities.
• $26.8m over two years from 2019-20 for round five of the Stronger Communities Programme, providing funding for small capital projects that deliver social benefits for local communities.
In the Australian Capital Territory:
An additional $50m from 2021-22 for priority regional and urban transport projects in the ACT. This includes $30m for the Kings Highway corridor.
New South Wales
• An additional $6bn from 2018-19 for priority regional and urban transport infrastructure in NSW, including $3.5bn for the first stage of the Western Sydney North South Rail Link, $1.6bn for the M1 Pacific Motorway Extension, $405m in additional funding for the M12 Motorway, and $400m for the Newell Highway.
• An additional $60m from 2019-20 for Tiwi Island road upgrades in the NT.
• An additional $2.6bn from 2020-21 for priority regional and urban transport infrastructure in QLD, including $800m for the Gateway Motorway extension, $500m for the M1 Upgrade Program and $425.4m for Bruce Highway projects.
• $9.6m over five years from 2018-19 to establish the North Queensland Water Infrastructure Authority.
• $71m from 2019-20 towards the Hinkler Regional Deal to support community and transport infrastructure projects.
• An additional $68m from 2021-22 for Tranche 3 of the Tasmanian Freight Rail Revitalisation project.
• An additional $1.8bn from 2018-19 for priority regional and urban transport infrastructure in SA, including $1.5bn for the North-South corridor and $259.8m for a South Australian Rural Roads Package.
• An additional $2.8bn from 2019-20 for priority regional and urban transport projects in Victoria, including $1.1bn for upgrades to south eastern and northern suburban roads, and $700m for the South Geelong to Waurn Ponds Rail Upgrade.
• $2bn to deliver fast rail from Geelong to Melbourne.
• $30m from 2020-21 in additional funding for the Geelong City Deal to upgrade tourism infrastructure in the region.
• An additional $932.6m from 2019-20 for priority regional and urban transport projects in WA, including an additional $348.5m for Tonkin Highway upgrades, $207.5m for Level Crossing Removals.
National Freight and Supply Chain Strategy – additional funding
As part of the National Freight and Supply Chain Strategy announced in last year’s budget, the Government will provide an additional:
- $6m to fund engineering assessments for local government owned road network infrastructure;
- $5.2m for the design of a freight data hub, including arrangements for data collection, protection, dissemination and hosting;
- $3.2m for the establishment of a freight data exchange pilot to allow industry to access freight data in real time and a survey of road usage for freight purposes; and
- $2m to build an asset information collection, storage and sharing system.
Energy – Climate Solutions Package
As preannounced, there will be a Climate Solutions Package providing:
- Up to $1.38bn in equity over six years from 2019-20, to support the delivery of the Snowy 2.0 project, subject to Snowy Hydro Limited (SHL) achieving financial close on the project and the commencement of the main project works, expected in 2020.
- $56m in 2018-19 for a feasibility study to accelerate the delivery of Marinus Link, a second interconnector between Tasmania and the mainland, to unlock pumped hydro storage potential in Tasmania and provide more affordable and reliable electricity for homes and businesses.
International – Australian Infrastructure Financing Facility for the Pacific
The Government is establishing the Australian Infrastructure Financing Facility for the Pacific (AIFFP) which will provide $1.5bn of non-concessional loans and $500m of Official Development Assistance grants for high priority infrastructure projects in the region, and in Timor Leste. The Government is also expanding the Export Credit Agency's (Efic) capability with an extra $1bn in capital to fund investments that are also in the national interest.
This budget includes an additional $12.7m over four years from 2019-20 to support AIFFP.
Population Package – National Faster Rail Agency and Centre for Population
The Government will provide $23.4m from 2019-20 to establish a Centre for Population to inform and coordinate the development of population policy across Australia, which includes a focus on better matching infrastructure investments with regional and local needs.
The Government will also provide $14.5m from 2019-20 for a National Faster Rail Agency to identify and support the development of fast rail connections between capital cities and key regional centres.
BUSINESS SUPPORT AND PRACTICE
The instant asset write-off will now be available to those businesses with a turnover of up to $50m. The threshold has also been increased to $30,000. This is an improvement on the policy announced earlier this year (to extend the threshold to 30 June 2020 with a $25,000 threshold).
The company tax rate will be cut to 25 per cent five years earlier than previously planned for small and medium-sized companies with an annual turnover of less than $50m.
There will be extension and expansion of the Australian Tax Office (ATO) Tax Avoidance Taskforce on Large Corporates, Multinationals and High Wealth Individuals with $1bn in additional funding to the ATO.
Support for small businesses with tax disputes will continue with continued funding of up to $57.5m announced to 2022-23.
SKILLS AND WORKFORCE-RELATED MEASURES
Skills Package – skills for today and tomorrow
The Government is providing $525.3m over five years from 2018-19 to a skills package that focuses on the Vocational Education and Training (VET) system. To note, the package includes:
- $132.4m over four years from 2019-20 to establish a National Skills Commission to build an enhanced approach to skills development.
- $20.1m over four years from 2019-20 to better identify emerging skills needs through the Jobs and Education Data Infrastructure Project.
The package also includes over $200m to establish a new Additional Identified Skills Shortage Payment to support up to 80,000 new apprentices.
School Funding – strengthening the capacity of mathematics teachers
The Government will provide $22.2m over five years from 2018-19 for initiatives to support improved student achievement and to build the capacity of teachers. This funding includes $9.5m over four years from 2019-20 to strengthen the capacity of teachers across Australia to teach mathematics and phonics through the delivery of online teaching and learning resources.
Prioritising mental health – National Mental Health Workplace Initiative
The Government will provide $229.9m over seven years from 2018-19 to improve mental health services within the community. This includes $11.5m over four years from 2019-20 to the National Mental Health Commission for the National Mental Health Workplace Initiative to improve the mental health and wellbeing of working Australians.
New regional visas – population package
The Government will provide $49.6m over five years from 2018-19 to introduce needs visas focused on regional Australia. These visas, introduced from November 2019, are:
- The Skilled Work Regional (Provisional) visa.
- The Skilled Employer Sponsored Regional (Provisional) visa.
They will replace the existing Regional Sponsored Migration Scheme (subclass 187) visa and the Skilled Regional (Provisional) visa (subclass 489) and will permit skilled migrants to work in regional Australia for a period of five years.
The Government will also introduce a new Permanent Residence visa for regional Australia from November 2022.
Reduction in migration program planning levels by 30,000 places
The Government will reduce the 2019/20 planning level cap for the permanent migration program from 190,000 to 160,000 places for four years from 2019-20.
The 2019/20 planning level cap for the skill stream is 108,682 places (down from 128,550 places in 2018/19), which is broken down as follows:
- Employer Sponsored – 30,000 places.
- Skilled Independent – 18,652 places.
- Regional – 23,000 (includes 9,000 places for Skilled Employer Sponsored, and 14,000 places for Skilled Work Regional – the two new visa types).
- State/Territory Nominated – 24,968 places.
- Business Innovation & Investment program – 6,862 places.
- Global Talent – 5,000 places.
- Distinguished Talent – 200 places.
Additional $3.4 million in funding for Women in STEM initiatives
The Government will provide $1.8m in funding to extend the Science in Australia Gender Equity (SAGE) initiative. The SAGE initiative supports higher education and research sectors to investigate improvements to gender equity policies and practices. The Government will also provide $1.5m in funding for a national digital awareness raising initiative. This initiative will be implemented with the support of Australia’s Women in STEM Ambassador, Professor Lisa Harvey-Smith.
Centre for Procurement Excellence: Better practice in procurement
The new Centre of Procurement Excellence, being led by the Department of Finance, aims to enhance procurement capability and productivity across the public sector by:
- sharing experience, knowledge and better practice
- strengthening partnerships with industry to build a shared understanding of issues
- developing and disseminating self-help tools to promote greater efficiency in processes and systems
- considering options to unlock further efficiencies through coordinated procurement.
By simplifying, standardising and coordinating procurement practices and processes, efficiencies can be realised for the Government and business—making buying for and selling to the Government, easier and simpler.