On Tuesday, Treasurer Josh Frydenberg handed down a Federal Budget touted as the most significant in decades, with a back-to-basics focus on boosting the economy.
The 2020-21 Budget includes an investment of $1.5 billion over four years for the Modern Manufacturing Strategy to allow Australian manufacturers to scale up, compete internationally and create more jobs.
The centrepiece of the Strategy is the $1.3 billion Modern Manufacturing Initiative (MMI), which will support projects within six National Manufacturing Priorities, including resources technology and critical minerals processing, food and beverage, medical products, recycling and clean energy, defence and space.
BDO Australia, the world leading accountancy and advisory organisation, described the new Modern Manufacturing Strategy as one that aims “to play to Australia’s strengths, improve collaboration and commercialisation, and create a sector that is modern, dynamic and highly skilled.”
Ryan Pollett, National Leader, Manufacturing & Wholesale at BDO Australia, said the Modern Manufacturing Strategy was a positive first step to securing Australia’s future growth in manufacturing and fuelling economic recovery.
“At the centre of the plan is a $1.3 billion investment aimed at getting manufacturers on the right growth trajectory – through targeted support to better commercialise their operations, enter new export markets and innovate through closer collaboration between government, research and industry,” he said.
BDO Australia, which delivers a comprehensive analysis of the Australian Federal Budget each year, notes that the Budget includes ‘loads of tax related measures for business’ and a number of supporting measures for industry ‘with the emphasis on getting the nation spending to smooth out the ride ahead’.
“Significant measures also include plans to reduce energy costs, an additional $2 billion investment in R&D tax incentive and $107 million dedicated to strengthening supply chains of critical goods,” Mr Pollett continued.
“As both energy and R&D are substantial costs for manufacturers, with studies showing that Australian manufacturers can spend up to 20-40% on gas and electricity and contribute approximately 25% of Australia’s total R&D spending, these measures will provide much-needed relief allowing the sector to focus its efforts on innovating and establishing itself as a global leader of high-quality manufactured goods.
As a part of the ‘job-centric’ 2020 Budget, the Government will provide $1.2 billion from 2020-2021 to increase the number of apprentices and trainees employed. This
investment will be made over four years and is accessible to businesses of any size.
“Finally, a $2.8 billion wage subsidy to support apprenticeships and trainees will allow manufacturers to bring in new talent and upskill their workforce to meet the demands of an evolving sector,” Mr Pollett concluded.
Video: BDO Australia YouTube channel