The ‘Stronger foundations for a better future’ Budget delivers a welcomed $4.2 billion surplus which shows the current strength of the Australian economy but forecasts that GDP growth is expected to slow from 3.25 per cent in 2022-2023 to 1.5 per cent in 2023-2024, highlighting future challenges.

Importantly, this Budget should not have a substantial impact on inflation, taking some pressure off the Reserve Bank needing to raise interest rates.

Federal Treasurer Jim Chalmers said the Budget delivers “a stronger and more sustainable fiscal position and has been achieved while also providing responsible cost‑of‑living relief, investing in a stronger and more secure economy, and funding the critical services Australians rely on.

“The responsible budget plan is improving the strength and sustainability of the nation’s finances and building stronger foundations for a better future.”

The Federal Government had previously signalled energy incentives and migration reform for the 2023-24 Budget. These and other key measures align with the Victorian Chamber’s Federal Budget submission:

Energy

• More than $1.6 billion for energy saving upgrades for homes, businesses and social housing, including $314 million for the Small Business Energy Incentive, to provide businesses with annual turnover of less than $50 million, an additional 20 per cent deduction on spending that supports electrification and more efficient use of energy.
• $1.5 billion for the Energy Price Relief Plan for eligible households and small businesses.

Business and tax support

• Instant tax write-offs for assets valued up to $20,000 each for businesses with a turnover of less than $10 million a year.
• $392.4 million Industry Growth Program to support small-to-medium-sized enterprises and startups to commercialise their ideas and grow their operations.
• $431.9 million over four years to improve support for small to medium enterprises (SMEs) and startups.
• $210 million over four years to expand the Emerging Markets Impact Investment Fund (EMIIF) from $40 million to $250 million.

Education and training

• $3.7 billion investment in a new five-year National Skills Agreement that will provide an extra 300,000 fee-free TAFE and vocational educational training places.

Other

• $101.6 million over five years to support and uplift cyber security.
• Measures to improve female participation in the workforce including making child-care more accessible.
• Improved tax conditions to facilitate build-to-rent developments which will help alleviate accommodation shortages and improve labour mobility.
• $4.1 billion for Long-Range Missile Systems and a sovereign manufacturing capability to produce them in Australia. Victoria is home to a thriving defence industry.

Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra said: “The Federal surplus is a good news story and business has been a major contributor to the positive bottom line by creating and supporting employment which has added significant tax revenue.

“The allocations for business are modest, but the Chamber is pleased to see funding towards energy cost relief, renewable energy transition, business asset write-offs, cyber security, innovation, the defence sector and increasing female workforce participation.

“As the largest connector of apprentices and trainees to employers in the country, the Victorian Chamber looks forward to being part of the plan to extend the National Skills Agreement.

“The Chamber hopes the 90-day freeze on infrastructure projects won’t impact committed projects such as Melbourne Airport Rail, Suburban Rail Loop and Geelong Fast Rail.”

Funding for the transition to a net-zero economy was provided with the welcomed Hydrogen Headstart announcement. The Victorian Chamber awaits further details on the implications of this funding. We would encourage Government to include blue hydrogen and to make sure that Victoria is able to secure its fair share for our future hydrogen industries.

The Victorian Chamber’s full overview is available at the 2023-24 Federal Budget page.