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Federal Government to save up to $845.6m with new budget cuts 

May 15, 2014 • News

With the adoption of the new budget, the Federal Government is on its way to successfully accomplish one of its set goals — slashing government handouts and focusing on “supporting the commercialisation of good ideas, job creation and lifting the capability of small business.”

Image credit: flickr User: Douglas Kelley

Image credit: flickr User: Douglas Kelley

According to The Australian, the Federal Government has changed its approach regarding industry policy by abolishing eight industry assistance programs, including Com­mercialisation Australia, Enterprise Connect, Enterprise Solutions and the Innovation Investment Fund. With this move, it will save $845.6 million over five years.

The Federal Government’s new approach to industry policy is to be implemented by the brand new Entrepreneur’s Infrastructure Program, valued at $484.2 million over five years. The program will be focused on “supporting the commercialisation of good ideas, job creation and lifting the capability of small business.”

“The program will (also) focus on the provision of market and industry information, and the ­facilitation of access to business management advice and skills from experienced private sector providers and researchers,’’ the budget papers say.

Australian Industry Group’s Chief Executive Innes Willox says the new program needs to be explained to businesses.

“Government needs to talk further with industry about that, and what we’re hoping is that it will cherry-pick the best of programs like Enterprise Connect, like Commercialisation Australia, all the research funding, pull that together and make it very industry-focused. So that the focus changes from grants to advice, and that’s something that we would welcome on the whole,” he said.

“But there is going to be some short-term pain for industry as well. But there are some positives, some good work around skills programs, particularly putting industry at the front and centre of future training needs, and we believe that’s very important.“

The Automotive Transformation Scheme will be abolished on 1 January 2018, saving $618.5 million. The Australian Workforce and Productivity Agency will also be abolished.

The Australian Renewable Energy Agency has been abolished, while carbon storage programs have been slashed.

Not all is gloomy and grim, as the Government announced to provide $50 million over three years to establish the Manufacturing Transition Grants Program aimed at assisting manufacturers to higher value manufacturing.

Further, grants of up to $10 million will be made available for production processes upgrades or new plant and equipment purchasing.

The resources sector will also see some benefits, like the removal of the Mineral Resources Rent Tax in 2014 and further support for the development of new projects and exploration.

“To improve business opportunities, we are cutting company tax by 1.5 percentage points for around 800,000 businesses. We are abolishing the carbon tax and we are abolishing the mining tax,” said the Honourable J. B. Hockey MP, Treasurer of the Commonwealth of Australia, in his speech delivered on 13 May 2014, on the Second Reading of the Appropriation Bill (No. 1) 2014–15.

“We are removing $1 billion a year in red tape because regulation means more staff doing paperwork and fewer staff helping customers. We are also creating new business opportunities and expanding markets for our farmers, miners and service industries in Asia through new free trade agreements with Korea and Japan.”

 

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