2024-25 Federal Budget: Is there much new other than a green bonanza?
Treasurer Jim Chalmers has handed down the 2024-25 budget, delivering a $9.3bn surplus, with a focus on addressing inflation and cost of living pressures. Significant investments have been made to propel Australia towards becoming a renewable energy superpower, while the rest of business has largely been ignored.
Our full summary can be found here.
Green Manufacturing
Critical minerals and products essential to transitioning to net-zero emissions have received a big funding boost in this budget. The government will funnel billions of dollars into helping key industries boost local manufacturing and bolster investment under its “Future Made in Australia Plan”. The green transition plan will include major loans, investments, and incentives. This includes $19.7 billion to chase the ambitious goal of turning Australia into a renewable energy superpower.
$3.2 billion will be spent over the next decade to accelerate investment in renewable hydrogen and solar and battery supply chains. This includes a new innovation fund to support the commercialisation and rollout of new renewable technologies, including green metals, low-carbon liquid fuels and battery manufacturing. Battery and solar panel makers are the big beneficiaries via the $523 million Battery Breakthrough Initiative and the $835 Solar Sunshot program.
$8 billion will be invested over the next decade to support renewable hydrogen production, including a Hydrogen Production Tax incentive, which will provide a $2 incentive per kilogram of renewable hydrogen produced from 2027.
Business and Jobs
The $20,000 instant asset write-off, which had been slated to end on June 30 this year, will be extended for another 12 months. One million eligible small businesses will also benefit from a $325 energy rebate.
The Government will also invest $777.4 million to establish the Remote Jobs and Economic Development Program, which will create 3,000 jobs in remote Australia and support income support recipients move into paid employment.
Defence
The Government will provide $166.2 million to support the implementation of the Defence Industry Development Strategy.
This includes the establishment of the Defence Industry Development Grant program for Australian defence industry, supporting Australian businesses to increase their scale and competitiveness and respond to Defence’s capability requirements.
Innovation
The Government will invest $46.9 million to support the development of industries in Australia and maintain the affordability of nuclear medicines for Australians. This includes $25.9 million to the Australian Nuclear Science and Technology Organisation to continue production of affordable nuclear medicines and $18.0 million to continue to build the capability of the National Reconstruction Fund Corporation to undertake investments and deliver on its policy outcomes. This builds on the 2023–24 National Reconstruction Fund Corporation establishment.
The Government will also provide $1.7 billion funding over ten years for investments in innovation, science and digital capabilities to support a Future Made in Australia.
Funding is spread across multiple projects including funding for Geoscience Australia to map Australia’s national groundwater systems and resource endowments to identify potential discoveries of all current critical minerals and strategic materials, equity and loans provided by Export Finance Australia to PsiQuantum Pty Ltd to support the construction and operation of quantum computing capabilities, and a new fund to establish Australia’s partnership with the United States on the next generation of the Landsat satellite earth observation program (Landsat Next).
Concerningly, the cost of this measure is being met from savings identified in the Department of Industry, Science and Resources, highlighting the government’s failure to boost investment in innovation.
It’s a Wrap
In conclusion, Treasurer Jim Chalmers’ 2024-25 budget, while addressing inflation and cost of living pressures with a $9.3 billion surplus, is largely disappointing for the business sector. While significant investments have been made to propel Australia towards becoming a renewable energy superpower, the rest of the business sector has largely been overlooked. The budget includes substantial funding for green manufacturing, particularly in critical minerals and products essential for transitioning to net-zero emissions. The extension of the $20,000 instant asset write-off and other measures aim to support businesses and jobs are helpful. However, concerns arise regarding the government’s approach to innovation funding, as the cost of these measures is being met from savings rather than boosting investment in innovation. This budget underscores a prioritisation of addressing the cost of living over new programs for business growth and innovation. Except for the green bonanza.
Budget papers can be found here.