The Federal Budget: Changes to Business Grants, R&D and Innovation
News ID: 19822
Treasurer Scott Morrison handed down his second Federal budget last night. While there is significant discussion around infrastructure spending and changes to welfare payments, the impact on business grants and R&D Tax Incentive has been minimal, and that’s good news.
For full details of grant changes, please read our detailed summary.
Or, for a simple one page list of new and extended grant programs read our short summary.
What hasn’t changed
Many of the key government grants and programs for business have remained untouched. The R&D Tax Incentive has been the subject of continued speculation, but in last night’s budget, there were no changes announced. The government is still to respond to the recommendations from the recent review of the R&D Tax Incentive, however, from a budget perspective, no news is good news.
Programs such as the Entrepreneurs Program, including Accelerating Commercialisation, and Export Market Development Grant have had no changes. No other key grants have been abolished or cut either.
In the main, the $40.9B of Federal Grants (as a share of the $49.1B of total business grants and assistance) has had minimal changes.
Manufacturing support gets a bump
The government announced last week the budget measure to establish the Advanced Manufacturing Fund. This $101.5M program has several components, most notably the $47.5M Advanced Manufacturing Growth Fund which seeks to fund up to a third of capital upgrades that drive innovation and advanced manufacturing. This applies mainly to Victoria and South Australia, however, manufacturers in other states may benefit from other elements of the program.
While not a sizeable investment, the program does build on existing programs and initiatives and is more business orientated, rather than just industry wide support.
What’s in it for Small Business?
There are no new grant and assistance programs announced for small business in this years budget. The government continues to provide support through the $20,000 Asset Write Off and tax cuts for businesses under $50M turnover, but no new grants or programs have been announced.
Are Start-ups affected?
While much of the concern around start-ups is focussed on potential changes to the R&D Tax Incentive, this hasn’t eventuated and, as mentioned earlier, that’s good news. There has been no change to programs such as Entrepreneurs Program or Landing Pads.
There has been small additional support for:
• Encouraging Entrepreneurship and Self Employment through expansion of the New Enterprise Incentive Scheme and other programs.
• Extending business support for indigenous entrepreneurship.
• Refocus of Incubator support to Regional Areas.
Is Regional Australia getting left behind?
Regional Australia will benefit from key infrastructure, such as:
• $10B National Rail Plan.
• $200M for the Building Better Regions Fund (BBRF) to support construction of community infrastructure and build regional capacity.
• $472M for infrastructure projects through The Regional Growth Fund, which includes $272M for grants of $10M or more for transformational projects in regions undergoing structural adjustment.
The $220M Regional Jobs and Investment Packages will help 10 Australian regions to diversify and grow their economies. The regions include Latrobe Valley, Goulburn Valley, Regional Tasmania and several in Queensland and New South Wales. Other support includes the refocus of Incubator support to regional areas and extension of support for indigenous entrepreneurship mentioned above.
What about support for training and skills development?
Australian jobs and skills are a focus of this year’s budget. The $1.5B Skilling Australians Fund will support state and territory governments in improving outcomes for apprentices, trainees, pre-apprentices and higher level skilled Australians. $60 million has been allocated to establish an Industry Specialist Mentoring for Australian Apprentices Program and incentives to support regional apprentices will continue to be funded. The previously mentioned Regional Jobs and Investment Package will provide $220M into 10 regions to diversify and grow their economies.
A budget without surprises is always welcome. And while there were some small additions in some key areas, overall, the landscape for business grants and assistance remains consistent. This budget provides certainty and confidence for business to continue to innovate and grow.