Treasurer Josh Frydenberg tonight handed down his fourth Federal budget in the wake of a looming Federal Election. The emphasis of this budget is very much on continued efforts to boost economic activity, address cost of living pressures and reduce debt. But what about grants?
In the May 2021 Federal Budget, the government announced the introduction of a patent box tax regime that will provide tax concessions for Australian medical and biotechnology innovations. The regime will encourage innovation in Australia by taxing corporate income derived from patents at a concessional effective corporate tax rate of 17%, rather than the regular tax rate of 25%-30%, from 1 July 2022.
As part of this budget, the government has announced that patent box will be expanded to support practical, technology focused innovations in the Australian agricultural sector as well as low emissions technology innovations for income years starting on or after 1 July 2023.
In support of innovation emerging from the Australian university sector, the Government will provide $988.2 million to deliver a research reform package to drive university industry collaboration, workforce mobility and research translation and commercialisation. This includes $505.2 million over 5 years from 2021 22 to establish Australia’s Economic Accelerator (AEA) grants to support university research projects from proof of concept and proof of scale through to commercialisation. Funded projects will align with the National Manufacturing Priorities and will be done in partnership with industry.
Lastly, in support of medical research and biomedical discoveries, the Government will continue to invest in life saving and job creating medical research by committing a further $1.3 billion under the Medical Research Future Fund (MRFF) Ten Year Investment Plan. The Government will also extend the Biomedical Translation Fund’s (BTF) initial investments period by a further 3 years to support the commercialisation of biomedical discoveries.
The Government will provide $267.1 million over 4 years to modernise and improve Australia’s trade system and support Australian exporters. This includes the welcome announcement that the government will inject an additional $80.0 million into the Export Market Development Grants (EMDG) program to support small and medium export businesses to re establish their presence in overseas markets.
Tax Benefits for Small Business
To support small businesses, the Government will introduce a skills and training boost to support small businesses to train and upskill employees. Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20%of expenditure incurred on external training courses provided to their employees.
The Government will also introduce a technology investment boost to support digital adoption by small businesses. Small businesses will be able to deduct an additional 20 per cent of the cost incurred on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services. An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost.
Support for the Regions
The Government will provide $2.0 billion over 5 years from 2022-23 to establish the Regional Accelerator Program (RAP) to drive transformative economic growth and productivity in regional areas. The RAP will provide dedicated funding for regional businesses and communities to access programs targeted to local priorities in infrastructure, manufacturing and industry development, skills and training, research and development, and education.
Australia’s waste and recycling sector will get a boost via an $83.1 million investment to expedite Australia’s transition to a more circular waste economy. This includes $60.4 million to boost Australia’s plastics recycling capabilities through state of the art technologies and advanced recycling solutions for problematic plastics under the Recycling Modernisation Fund.
The Government will also provide a further $446.1 million to increase energy security, maintain affordable and reliable power for households and businesses and reduce the cost of deploying low emissions technologies, consistent with Australia’s Long Term Emissions Reduction Plan.
Support for Women
COVID-19 has left women economically disadvantaged through unemployment, underemployment, lowered incomes, less secure work and greater household and family demands. Part of the Government’s response to this will be to provide funding of $482.0 million to help women advance their careers and improve their economic security.
This includes $38.6 million to provide additional support for women who commence in trade occupations in order to boost the number of women participating in these roles, $9.4 million to bring women into board positions and fund the Future Women’s Jobs Academy, $9.0 million to provide continued support to the Future Female Entrepreneurs program and $4.7 million to improve women’s participation and encourage women to consider a career in Australian manufacturing
The Government will also provide support to develop and deliver small, intensive business oriented online financial capability workshops to around 100 applicants through the Boosting Female Founders Initiative program.
Defence industry support programs will get a $151.6 million boost which includes $84.7 million for the Sovereign Industrial Capability Priority Grants Program and $20.3 million for the Skilling Australia’s Defence Industry Grant Program. These programs will enable Australian small and medium sized businesses to supply critical industrial capabilities to defence and provide training and skilling opportunities for defence industry.
In 2020, the government launched its $1.5 billion Modern Manufacturing Strategy, a suite of programs to help Australian manufacturers scale-up, become more competitive and resilient and create jobs. Funding under this program supports support manufacturers in six priority areas: resources technology and critical minerals processing; food and beverage manufacturing; medical products; clean energy and recycling; defence industry; and space industry.
The Government will provide an additional $328.3 million to further support the Modern Manufacturing Strategy and address critical supply chain vulnerabilities. This includes $250.0 million to extend the Modern Manufacturing Initiative, $53.9 million to extend the Manufacturing Modernisation Fund and $6.9 million to develop Manufacturing Investment Plans.
Our Grants Extract from the Budget Papers is accessible to GrantGuru subscribers here.