Our 2023/24 Budget Analysis (and what it means for regional WA)
We’ve gone beyond the headlines to detail what you can expect in the 2023/24 Australian Government budget and WA Government budget, with a focus on agriculture, regional communities, the environment and regional enterprise.
Snapshot
The 2023–24 Australian Government budget had a stated focus on a stronger, more inclusive, and more sustainable economy. Accordingly, a key part of this budget was about preparing to responding to major structural shifts that are shaping the economy. These are: the growing care and support economy, expanding use of data and digital technology, and climate change and the net-zero transformation.
WA’s strong economic growth has been further supported by robust exports growth. The 2023-34 WA Government budget had a stated focus on being socially progressive, fiscally responsible, and economically successful. It featured a notable investment in the strained health system and increased investment in housing stock.
AGRICULTURE
Australian Government budget
Biosecurity will be a focus with $1 billion over 4 years to strengthen Australia’s biosecurity system. However, from 1 July 2024 Australian producers of agricultural, forestry and fishery products will pay a biosecurity protection levy.
In relation to sustainable agriculture:
- $302.1 million over five years to the Natural Heritage Trust to support farmers’ transition to a low emissions future and strengthen agricultural sustainability
- $38.3 million over four years to support agricultural statistics, climate analysis and upgrades to data and information systems for the ABARES
- $5.6 million over two years to establish a panel to undertake an independent assessment and consultation process to inform the phase out of live sheep exports by sea
- $5 million over four years to develop a renewed Australian Animal Welfare Strategy
Budget reaction
“A missed opportunity to address food price inflation.… Road funding, tax incentives and measures to address worker shortages [are] areas where tonight’s budget falls short.”
National Farmers Federation
WA Government budget
As well as the announcements of $22.2 million for sheep and goat eID transition, $20.2 million to the Future Drought Fund, and $18.8 million to the Healthy Estuaries Program, other initiatives include:
- $10.4 million – Emergency animal disease preparedness
- $7.6 million – Feral Cat Strategy
- $7 million – Expansion of Southern Rangelands Revitalisation project
- $5 million – Water Smart Farms
- $4 million – Activation of Yerriminup Agribusiness Precinct (Shire of Plantagenet)
- $1.6 million – Implement the Aquaculture Development Plan for WA
- $1 million – Digital Foundation Program
Other initiatives to watch out for
- Peel Agrifood Activation Fund – Food Technology Facility Project
- Food and Beverage Value-Add Fund
- Horticultural Netting Infrastructure Scheme – Pome Fruit
REGIONAL COMMUNITIES
Australian Government budget
The Australian Government plans to establish a Regional Investment Framework (People; Places; Services and Industry) and restore the ‘State of the Regions’ reporting.
Expanding Australia’s housing supply has been a focus in the Federal Budget. Subsequently, initiatives include:
- Encouraging investment and construction in the build-to-rent (BTR) sector by accelerating tax deductions and reducing managed investment trust withholding tax rate for BTR developments (50+ apartments or dwellings)
- $2 billion increase (total of $7.5 billion) to NHFIC Government-guaranteed liability cap to enable more low-cost loans to Community Housing Providers
- Amending NHFIC’s Investment Mandate to require it to take reasonable steps to allocate a minimum of 1,200 homes to be delivered in each state and territory within five years of the Housing Australia Future Fund commencing operation
Additionally, $2.7 billion over five years will go to increase the maximum rates of the Commonwealth Rent Assistance (CRA) allowances by 15 per cent.
Across the country, $199.8 million over six years has been allocated to address entrenched community disadvantage, which includes $100 million over five years to establish a social impact investment Outcomes Fund. The Fund will make contractual payments to states, territories and service providers to deliver agreed, measurable outcomes through specific projects.
Other initiatives to watch out for
- $600 million Growing Regions Program for community and economic infrastructure projects in regional and rural Australia – opening in July
- $43.6 million over four years to establish the National Road Safety Action Grants Program
- $8.5 million over four years to increase funding for the Regional Arts Fund
- $13.5 million over three years for an additional round of the Remote Airstrip Upgrade Program
- $1.7 million to update ‘Our North, Our Future: White Paper on Developing Northern Australia to identify opportunities to address new and emerging geographic and economic challenges in Northern Australia’
- National Student Wellbeing Program in schools
Budget reaction
“We will continue to work with the Government to ensure regional Australia is front and centre of the most pressing national challenges: housing affordability and availability; workforce shortages and cost of living.”
Regional Australia Institute CEO Liz Ritchie
“It is disappointing the Government did not deliver on its commitment to a fair and reasonable increase in Financial Assistance Grants. This year, $3.1 billion has been provided for Financial Assistance Grants funding, with WA to receive $376.9 million. Financial Assistance Grants now represent 0.5% of total Commonwealth Tax revenue, down from 0.52% in 2022-23.”
WALGA
WA Government budget
The development industry in WA has been facing considerable supply-side pressures, associated with materials and labour. Smaller regional projects have faced additional delivery challenges with the redirection of regional contractors and resources to major natural disaster recovery projects.
In view of this, $48 million in training initiatives to expand the residential construction workforce across WA were announced. Also in relation to housing, this budget announced:
- $61.6 million increase in GROH funding (including $45 million refurbishment program with $28.5 million expenditure forecast for 2023-24)
- $49 million – 100 supported landlord homes for people experiencing rough sleeping in regional WA, in partnership with CHOs (plus $3 million for operational costs)
- $30 million to projects in regional WA, including residential and commercial land at Broome North, new housing options in Karratha’s Madigan at Baynton West, and a range of residential and tourism opportunities in Albany
- $28.1 million – expanded Common Ground facility in Mandurah
- $18.1 million – new replacement campus at South Regional TAFE Esperance
- $12 million over four years – to deliver more development-ready land across regional WA through the Regional Development Assistance Program
- $8.3 million – Geraldton Aboriginal Short Stay Accommodation Service
- $6.8 million – upgrades to Agricultural Colleges across regional WA
- $6 million – Spencer Park renewal (Albany)
- $5 million – Withers renewal (Bunbury)
- $2.9 million – Temporary Regional Attraction and Retention Allowance for TAFE lecturers working in the Kimberley, Pilbara and Kalgoorlie
Overall, $11.2 billion in regional infrastructure spend is planned (9% funded by Royalties for Regions), with half for roads. The Bunbury Outer Ring Road project was allocated another $100 million (to total $1.35 billion), and the Albany Ring Road budget was increased by $40 million.
$29.9 million will be spent across regional ports upgrades. In aviation, $20.7 million over two years will go to the Regional Airfare Zone Cap, $2.3 million on the Warmun Airstrip Upgrade and $750,000 for a study into Remote Aboriginal Community Airstrips.
Other regional social infrastructure announcements include
- $277.9 million – Bunbury Regional Hospital redevelopment
- $77 million – Aboriginal cultural heritage in WA including new Local Aboriginal Cultural Heritage Services
- $20 million – Regional Economic Development (RED) Grants Scheme – open now
- $20 million – Keirnan Park (Shire of Serpentine-Jarrahdale) Recreation Precinct
- $14 million – Aboriginal Cultural Heritage Act 2021
- $11.7 million – expand Target 120 youth early intervention program, including in Northam, Bunbury, Albany, Kalgoorlie
- $6 million to establish an ACCO peak body
Other initiatives to watch out for
- $450 million – Social Housing Investment Fund
- $27.4 million – Community Sporting and Recreation Facilities Fund
- $7.49 million – Housing Diversity Pipeline (may include regional)
- $6.2 million – Great Southern Adventure Trails (in progress)
- $1.5 million – Collie Adventure Trails (in progress)
- $500,000 – Age-friendly Communities Social Connectivity Grants
- Temporary Regional Incentive for Teachers
- Workforce Support Collie Transition Package (in progress)
Budget reaction
“While the state budget contains welcome investment into new social housing, we were hoping for an accompanying significant boost in funding to the specialist homelessness support services sector, which are at breaking point.” Missed opportunities included delivering affordable rentals for key workers employed in non-government organisations (NGOs) in the regions.
Shelter WA CEO Kath Snell
ENVIRONMENT
Australian Government budget
The Australian Government announced several environmental initiatives. Aside from targeted energy bill relief, environmental initiatives related to housing are:
- $1 billion – Household Energy Upgrades Fund for home upgrades that improve energy performance and save energy
- $300 million – energy performance upgrades in 60,000 social housing properties, including CHOs
- $36.7 million – modernise and expand energy efficiency standards, includes expanding Nationwide House Energy Rating Scheme
The Capacity Investment Scheme will underwrite new investment in clean energy. $2 billion is set aside to accelerate development of Australia’s hydrogen industry, catalyse clean energy industries, and help Australia connect to new global hydrogen supply chains.
Funds from the Natural Heritage Trust special account will support local and long-term environmental and agricultural outcomes and $113.1 million redirected over 8 years will fund policy priorities including supporting clean technology investment, funding for diesel storage projects not taken up by industry, high-quality emissions data, tropical marine science activities and the Nature Positive Plan.
$83.2 million over 4 years is allocated to establish a national Net Zero Authority to promote economic transformation associated with decarbonisation and energy system change in regional areas, including support for impacted workers.
The Government will also amend the Petroleum Resource Rent Tax (PRRT) in response to the Treasury’s Review of the PRRT Gas Transfer Pricing (GTP) arrangements.
Other initiatives to watch out for
- The Nature Positive Plan: better for the environment, better for business
- Australia’s first National Climate Risk Assessment and a National Adaptation Plan
- Enhanced Australian National Greenhouse Accounts
- Implementation of priority reforms to the Australian Carbon Credit Unit (ACCU) scheme
Budget reaction
“The Government has missed an opportunity to tackle massive and expensive fossil fuel subsidies like the Fuel Tax Credit. This subsidy will cost the Budget over $41 billion over the next four years, significantly more than all the climate initiatives funded combined.”
Climate Council
WA Government budget
Funding will be provided to support the first two years of implementation of the Native Vegetation Policy. The Policy seeks a net gain in native vegetation to conserve biodiversity, fix carbon, create jobs and improve business certainty through regulatory clarity.
Work is underway to draft amendment legislation to establish a framework to support the use of recovered materials.
$2.7 billion will be spent to transition WA’s energy system for a low-carbon future, including funding for the King Rocks Wind Farm development, north-east of Hyden. The Climate Action Fund includes supporting decarbonisation of heavy industry, such as oil and gas, mining and mineral processing, and manufacturing.
Other initiatives to watch out for
- $39.8 million – Schools Clean Energy Technology Fund
- $36 million – Implement the Forest Management Plan 2024-2033
- $22.5 million – Cross-agency team for faster environmental approval decisions for proponents in WA’s renewable energy sector
- $13.6 million – Aboriginal Ranger Program (in progress)
- $3.7 million – Climate resilience in Aboriginal communities
- $3.13 million – Rural Water Planning Program
- $2.2 million – EV Smart Charger and Vehicle-to-Grid trial through Horizon Power
- $1.3 million – Studies to inform the Heavy Industry Sectoral Emissions Reduction Strategy
- $1.25 million – Urban Greening Grants to be administered in partnership with WALGA
- $1.13 million – Perth and Peel Regional Planning.
- $1 million – Climate Change Impacts on WA’s Water Resources
- $405,000 – Creating Climate Resilient Rivers
- Goldfields Major Solar Feasibility
- Food Waste for Healthy Soils
- Solar Schools Program
REGIONAL ENTERPRISE
Australian Government budget
Announced support for SME was:
- SME (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy. Up to $100,000 of total expenditure will be eligible for the Small Business Energy Incentive, with the maximum bonus deduction being $20,000.
- Temporary increase to the instant asset write-off threshold to $20,000.
- Continue the Single Business Service, supporting SMEs to engage with all levels of government.
- $392.4 million over four years to establish the Industry Growth Program to support Australian SMEs and startups to commercialise their ideas and grow their operations. Support will be targeted to businesses in the priority areas of the National Reconstruction Fund.
- $210 million over four years to expand the Emerging Markets Impact Investment Fund (EMIIF). The EMIIF will provide catalytic financing for SME operating in the Indo-Pacific and support the mobilisation of private and multilateral finance for development outcomes
- $101.6 million over five years to support and uplift cyber security in Australia. This includes $23.4 million over three years for a small business cyber wardens program delivered by the Council of Small Business Organisations Australia, to support small businesses to build in-house capability to protect against cyber threats.
- $21.8 million over four years to lower the tax-related admin burden for small businesses.
- $18.1 million over four years to improve the government procurement process for business, including increasing engagement with SME to promote awareness of opportunities to sell to the Australian Government.
In international engagement, $55.7 million over four years will go to enhance Australian diplomatic and business engagement with Southeast Asia and Timor-Leste, and $1.9 billion over five years to expand Australia’s engagement with Pacific Island countries. Funding for the Export Market Development Grants program will be reduced.
The Heavy Vehicle Road User Charge rate will increase by 6% per year over three years (from 27.2 c/L of diesel to 32.4 c/L in 2025–26). This will decrease expenditure on the fuel tax credit by $1.1 billion over 4 years and the change was a decision of the Infrastructure and Transport Ministers in April 2023 to contribute to road maintenance and repair.
The National Net Zero Authority will support regional communities, businesses and workforces to transition to renewable energy. $2 billion will go to establish the ‘Hydrogen Headstart’ to help underwrite large-scale renewable hydrogen projects through competitive hydrogen production contracts.
$116 million over five years will support the development of critical technologies in Australia to drive economic growth, boost technology industries and support the creation of new jobs and $20.9 million over five years is for initiatives to decarbonise the transport and infrastructure sectors and support achieving the net zero by 2050 target.
Budget reaction
“There is a missed opportunity to drive whole of economy growth through incentivising investment which remains the key to lifting productivity, delivering higher wages and ensuring sustainable returns to government. We urge National Cabinet to consider how we can drive innovation around housing and infrastructure planning.”
Business Council of Australia
WA Government budget
A focus will be promoting Western Australia as a strategic and regional digital hub for the development of data centre facilities growth.
The small business sector in Western Australia comprises 97% of all businesses. In 2023-24 a focus will be government collaboration to streamline engagement with SMEs through the development of a business interface as part of the ServiceWA App.
A $35 million top-up of the Industrial Land Development Fund will be prioritised towards planning and de-constraining initiatives to attract investment to Pilbara strategic industrial areas.
Other initiatives to watch out for
- $40 million – Sustainable Geoscience Investments to accelerate critical minerals discoveries
- New Digital Economy Strategy – aims to assist WA with its digital transformation, grow local capability and enable industry to leverage opportunities through the digital economy
- Three new early-stage venture funds (Purpose Ventures Fund, FundWA and Quokka Capital) through the WA Venture Support pilot program
- $7.3 million – New Industries Fund
- $6 million – Peel Business Park, Nambeelup (in progress)
- $5 million – Kemerton (City of Bunbury) General Industrial Area
- $2.75 million – Aboriginal Tourism Fund
- $2 million – New Industries Fund Regional Entrepreneurs in the Innovation Sector
- $1.5 million – Kalgoorlie Rail Realignment Business Case
- $650 – Small businesses credit on power bills
- Local Capability Funds
- Investment Attraction Fund
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A version of this blog post first appeared on Anna Dixon Consulting’s website, our previous brand.
