Last night the Federal Budget was delivered where the Government outlined policies for the automotive industry and Australian economy more broadly.

With heightened inflation, the government had a careful balancing act of investing in services and the private sector without increasing fiscal pressures. Here are the key budget initiatives that the automotive industry should be aware of:

Energy and Power Bills

• Power bill relief for small businesses of up to $650 for eligible businesses
• Small businesses with a turnover of up to $50 million will also be eligible for a $20,000 tax break if they invest in energy efficiency upgrades.

Skills and breaking down barriers

• $3.7 billion for a ‘revamped’ five-year national skills agreement with states and territories, which includes measures to attract more women into apprenticeships.
• New grant fund of $5 million over 3 years for encouraging women in male-dominated trades.
• Redesigning Australian Apprenticeship Support Services to improve career pathways and support more completions.

Employer Obligations

• From 2026, the Federal Government is proposing that employers must pay super at the same time as wages.
• $40 million to fund an Australian Tax Office compliance program targeting unpaid super.
• Broader crackdown on unpaid tax and super by medium and large businesses.

Road Safety

• $43.6 million National Road Safety Action grants program to support technology innovation and research and a funding investment for a vehicle inspections study.
• $18.9 million over 3 years from 2023–24 to procure road safety data, research and evaluate projects.
• $16.5 million over 5 years from 2023–24 for the car safety ratings program which includes testing protocols for light vehicles and safety evaluations of used vehicles.

National Electric Vehicle Strategy and the automotive transition

• $7.4 million over 4 years for the Fuel Efficiency Standards process.
• $5.2 million over 4 years to develop a national charging infrastructure mapping tool.
• $7.8 million to develop a Transport and Infrastructure Net Zero Roadmap and Action Plan.
• $57.1 million to engage with international partners for critical mineral projects.

Skilled Migration and Visas

• Skilled migration is getting a good boost. 70% of the 190,000 places in the 2023-24 Permanent Migration Program will be skilled only. Plus the government will improve permanency pathways for the Temporary Skill Shortage 482 Visa.
• $75.8 million over two years to address the surge in visa applications.
• Increase to the Temporary Skilled Migration Income Threshold (TISMIT) from the current rate of $53,900 to $70,000 for migrants nominated on a 482, 186 and 187 Visas.

MTA disappointed with several policies

While the Federal Government has opted for the lowest of the consulted options for heavy vehicle road user charges, we never the less remain concerned that it will still be raised by 6 per cent a year for the next three years from 27.2 cents per litre of diesel to 32.4 cents by 2025-26.

Similarly, we are disappointed the Instant Asset Write Off Scheme has decreased to $20,000. Small business could recently claim for a piece of new equipment worth up to $150,000. For example, this will stop businesses claiming the cost of new commercial vehicles as a tax deduction.

There has also been no investment from the Federal Government to fund electric and hybrid vehicle training, tools or infrastructure. Despite their National EV Strategy, we believe they need to work with industry to prepare for the automotive transition.

The Government will cease the eligibility of plug-in hybrid electric cars from the fringe benefits tax exemption from 1 April 2025.

Additional policies at a glance

Looking to the Future

Resurging commodity prices and income tax produced most of the heavy lifting to help the Budget return to surplus.

Economic conditions are set to deteriorate over the coming years, according to the Budget forecast.

The MTA will continue to monitor this and ensure the government prioritises small and medium businesses, and the automotive industry moving forward.

Northern Territory Budget

The Northern Territory Government also released its Budget yesterday, culminating in a range of investments and policies including:

• The Global Worker Attraction campaign to encourage skilled workers from interstate and overseas to live and work in the Territory.
• $24 million towards apprenticeships and traineeships to offer Territorians the opportunity to study and earn an income while undertaking a qualification.
• The Territory increased utility tariffs by 2.7% in 2022‑23 and will increase them by the same level in 2023‑24. These increases are far below the level of inflation and the increased costs of supply.
• The Territory Government will continue to provide up to $1000 for the workwear and gear bonus to support first-year apprentices and trainees buying workwear and equipment.
• $7.7 million to coordinate and deliver services around Darwin and Palmerston, including private security patrols, additional transit safety officers and security personnel on selected bus routes; and
• $4.8 million to support the Office of the Central Australian Regional Controller (OCARC) as part of a joint Commonwealth and Territory effort to address crime and antisocial behaviour in Alice Springs.