With Josh Frydenberg’s economic recovery plan expected to include a modern manufacturing budget package worth more than $1 billion, Manufacturers’ Monthly outlines what we already know and asks industry experts what to expect for tonight’s final budget rollout.
The government has drip-fed a number of major manufacturing announcements in recent weeks, including $55.4 million in funding for BlueScope Steel for its Advanced Steel Manufacturing Precinct around the Port Kembla steelworks, and support for the build of a manufacturing plant to produce mRNA vaccines in Victoria.
Ahead of the full budget release tonight, the Federal government has announced:
- $243 million for critical minerals manufacturing
- $10 billion for an east coast submarine base
- $4.3 billion for a naval shipyard upgrade in Western Australia
- $282 million for defence projects and shipbuilding in the Northern Territory
- $500 million for a new dam in Queensland for hydroelectricity, agriculture and mining and
Innes Willox, Chief Executive of the national employer association Ai Group, said tonight’s budget is an important opportunity for the Government to support the strong momentum of the post-COVID recovery and to assist in promoting gains towards full employment.
“The Budget is also an opportunity to lay the foundations for the uplift in business and infrastructure investment that is necessary to underpin a step-up in productivity growth and a return to sustainable rises in real incomes growth,” Willox said.
“It should also support business investment and ensure that the current pipeline of infrastructure projects can be delivered to schedule. With the availability of skilled labour the number one issue facing businesses, including those involved in delivering infrastructure projects, it is vital that the Budget delivers a step-up in efforts to lift the skills of the existing workforce combined with a rapid increase in skilled migration.”
“The immediate expensing of investments in capital equipment that has been available in recent years has helped lift investment plans and its continuation would be a major boost to these plans coming to fruition.”
CBA’s Chief Economist Stephen Halmarick said he expects to see policies designed to improve cash-flow for small businesses, including lowering tax instalment payments for 2022/23, the use of digital technology to reduce paper-work for tax obligations and data-sharing within the manufacturing industry.
“When it comes to government spending not all spending is equal in terms of its short-term impact on the economy,” he said. “An increase in defence spending, for example, will have a different immediate impact on the economy than direct cash payments to families to provide some relief for ‘cost of living’ pressures.”
Mr Halmarick also noted he expects confirmation of support for the establishment of a Covid-19 vaccine manufacturing and research facility in Melbourne.