FEDERAL BUDGET WILL GIVE WA A MUCH-NEEDED BOOST

Our Verdict

OUR VERDICT

ABN: 96 929 977 985 ACN: 099 891 611 
Copyright © 2019 Chamber of Commerce and Industry of Western Australia

Send

BUDGET BY NUMBERS

The Budget is forecast to return to positive territory in 2019-20, recording an expected surplus of $7.1 billion – higher than the $4.1 billion forecast in December last year. 

Higher than expected Government receipts can be attributed to surging iron ore prices following supply shocks in Brazil and strong employment growth nationally.

Over the four years to 2022-23, the Government has forecast $45 billion in cumulative surpluses.

Significant risks to the Federal budget remain, including a slowing China, slowing consumer spending and falling house prices on the east and west coast.

FEDERAL BUDGET ANALYSIS 2019

WA business congratulates the Federal Government for budgeting a $7.1 billion surplus in 2019-20, which would be the first surplus in 12 years, and outlining a plan to pay off net debt within a decade – the key to unlocking further investment in infrastructure, hospitals and schools and boosting job creation.

Targeted tax relief for small businesses and low and middle-income earners will boost spending in the WA economy, assist employment growth and help ease cost of living pressures for households. Four out of five WA jobs are created by business, which means making it easier for small businesses in particular to create jobs is critical.

Full Press ReleaseBudget by Numbers

The peak of net debt is expected to occur in 2018-19 and has been revised up from $350 billion in last year’s Budget to $373.5 billion.

The first repayment on Australia’s debt stockpile is forecast for 2019-20, with net debt falling to an expected $361 billion (18 per cent of GDP).

Net debt is forecast to continue falling in 2020-21 to $349.5 billion (16.8 per cent of GDP) and to $333.2 billion in 2021-22 (15.3 per cent of GDP).

CCIWA commends Treasurer Josh Frydenberg who today affirmed the Coalition’s goal of eliminating net debt by 2030 –  aiming to build surpluses toward one per cent of GDP within 10 years.

Commonwealth Treasury forecasts for economic growth in 2018-19 have been revised down to 2.25 per cent from 3 per cent in last year’s budget.  
Real GDP is forecast to grow at 2.75 per cent in 2019-20 and 2020-21.

If these forecasts are realised, it would extend Australia’s world record growth spell to 30 years of consecutive economic expansion.

Small Business

TAX

TaxInfrastructureSkills

FEDERAL BUDGET ANALYSIS 2019

FEDERAL BUDGET WILL GIVE WA
A MUCH-NEEDED BOOST

ABN: 96 929 977 985 ARBN: 099 891 611 

Copyright © 2018 Chamber of Commerce and Industry of Western Australia

Tax cuts will boost confidence in WA businesses and increase spending in the local economy.

RICK NEWNHAM

CCIWA CHIEF ECONOMIST

The first Budget since the Government’s GST deal will result in a $1.2 billion top-up payment delivered to WA in 2019-20. This exceeds the forecasted $814 million payment, largely due to a recent boost in iron ore royalties for the State. Historically, higher royalty income would have punished WA by shrinking our GST share. Thanks to reforms championed by CCIWA, the additional top-up payments will ensure WA gets 70 cents in the dollar this year.

$1.2 BILLION GST TOP-UP FOR WA

Copy line for context

Company tax cuts for small and medium-sized businesses with a turnover of less than $50 million being brought forward by five years is welcome news. The Government estimates 970,000 businesses employing more than five million workers will benefit when the tax rate reduction from 27.5 per cent to 25 per cent, effective 2021-22.   

Changes to the unincorporated small business tax discount will also be brought forward, with the rate increasing from 8 per cent to 13 per cent in 2020-21 and up to 16 per cent from 2021. This change is designed to ensure unincorporated businesses, which are taxed through the personal income tax system, experience the same amount of tax reduction as incorporated small businesses who are eligible for the Government’s company tax cuts.

SMALL BUSINESS TAX CUTS BROUGHT FORWARD

Copy line for context

MORE INCOME FOR LOW AND MIDDLE-INCOME HOUSEHOLDS

More than 10 million low and middle-income workers are expected to benefit from an increase in the Government’s income tax offset. A maximum lump sum payment of up to $1080 will be made to workers earning between $48,000 and $90,000 when they lodge their 2018-19 tax returns from July this year. 

People with a taxable income of up to $37,000 will receive up to $355, while the offset gradually reduces to zero as an individual’s income approaches $126,000. More household income will help address cost of living pressures and improve consumer confidence. The subsequent increase in consumer spending will be welcome news for WA businesses, especially the retail sector which has experienced flat sales growth for the past three years.

INFRASTRUCTURE

 STRONG STANCE ON 
COMPANY TAX PLAN WELCOMED

Ensuring that WA’s roads and rail are meeting the State’s increasing traffic demands doesn’t just benefit West Australians travelling to and from work, it is critical to business productivity which supports economic growth.

CHRIS RODWELL

CCIWA CHIEF EXECUTIVE OFFICER

The Federal Government’s $1.6 billion commitment to major infrastructure projects across the State is a significant step in the right direction to ease congestion on WA’s roads.

$1.6 BILLION IN NEW INFRASTRUCTURE FUNDING FOR WA

The funding, which includes an additional $348.5 million towards Tonkin Highway projects (bringing the total to $404 million), as well as funds for level crossing removals in Carlisle, Welshpool and East Victoria Park and the upgrade of the Fremantle Traffic Bridge will help improve business productivity.

REGIONAL WA BIG WINNERS

TONKIN HIGHWAY COMMUTERS TO BENEFIT FROM FURTHER EXTENSIONS

Tourism, commuter and business traffic will flow more freely in the regions, with commitments towards Albany and Bunbury ring roads, the Karratha to Tom Price road sealing, the Wheatbelt secondary freight network and the WA section of the Newman to Katherine corridor.

SMALL BUSINESS

Targeted tax relief for small businesses as well as low and middle-income earners will bring a welcome boost to confidence in WA.

CHRIS RODWELL

CCIWA CHIEF EXECUTIVE OFFICER

An extra 22,000 small and medium-sized businesses will be able to access the instant asset write-off after the Federal Government increased the annual turnover threshold from $10 million to $50 million which is welcome news for WA businesses.

The asset value has also increased from $25,000 to $30,000, providing the backbone of WA’s economy with more funds to innovate, grow their operations and create more employment opportunities.

INCREASING AND EXTENDING INSTANT ASSET WRITE OFF

The Government’s $11.1 million investment to remove unnecessary and burdensome red tape processes for WA small businesses will help our economy grow. It will make it easier for small businesses to meet compliance obligations and focus their time and resources on investing in their operations.

CUTTING RED TAPE FOR WESTERN AUSTRALIAN SMALL BUSINESS

IMPROVING ACCESS TO FINANCE

Establishing the $2 billion Australian Business Securitisation Fund will provide significant additional funding to smaller banks and non-bank lenders, enhancing small businesses’ access to finance on more competitive terms. This closes a funding gap in the lending market for small and family businesses.

SKILLS

The Government’s $525 million investment over five years to boost apprenticeships will go a long way toward arresting the 38.8 per cent decline in apprenticeship and traineeship commencements in WA since 2014, and lays the foundations for the systemic change the VET sector has been calling for.

CHRIS RODWELL

CCIWA CHIEF EXECUTIVE OFFICER

WA businesses and apprentices will benefit from the Federal Government’s $200.2 million funding commitment over four years to boost apprenticeships across the country. This will provide employers with access to a further $4,000 per apprentice in occupations experiencing acute skills shortages.

This measure aims to increase apprenticeships by 80,000 over five years and is part of an overall $525 million investment in the sector. Cost is often the biggest barrier for businesses to take on apprentices, so this incentive will go a long way toward supporting businesses to take on an apprentice in areas where we need them most.

INCREASED INCENTIVES TO HIRE APPRENTICES

The Government’s commitment of $132.4 million over five years for the establishment of a National Skills Commission and a further $15.6 million in capital funding over four years is an important first step to drive long term Vocational Education and Training (VET) reform.

CCIWA’s submission to the Expert Review into the VET Sector called on the Federal Government and State Governments to establish a clear strategy for the sector.

FUNDING FOR SYSTEMIC VET CHANGES

BETTER UNDERSTANDING OF SKILL NEEDS

Access to skilled labour is one of CCIWA members’ biggest barriers to growth. The Budget provides $20.1 million over four years to help businesses and policy makers better understand emerging skill needs, which will help enable WA businesses to better plan operations and manage risk. 

This, combined with $50 million to connect schools and industry in areas of high youth unemployment through training hubs, will help businesses to develop a robust talent pipeline and ensure that the training sector meets their needs.

A return to surplus in 2019-20 will pave the way for future investment in infrastructure, hospitals and schools and boost confidence in the nation’s economic outlook.

RICK NEWNHAM

CCIWA CHIEF ECONOMIST

Tax cuts will boost confidence in WA businesses and increase spending in the local economy.

Ensuring that WA’s roads and rail are meeting the State’s increasing traffic demands doesn’t just benefit West Australians travelling to and from work, it is critical to business productivity which supports economic growth.

Targeted tax relief for small businesses as well as low and middle-income earners will bring a welcome boost to confidence in WA.

The Government’s $525 million investment over five years to boost apprenticeships will go a long way toward arresting the 38.8 per cent decline in apprenticeship and traineeship commencements in WA since 2014, and lays the foundations for the systemic change the VET sector has been calling for.

A return to surplus in 2019-20 will pave the way for future investment in infrastructure, hospitals and schools and boost confidence in the nation’s economic outlook.

> Back to top

TELL US WHAT YOU THINK

> Back to top> Back to top> Back to top> Back to top

BUDGET SURPLUS IN SIGHT

NET DEBT

ECONOMIC GROWTH

> Back to topTell Us What You Think> Back to top
Fix the following errors:
Hide