Budget 2014: The sector-by-sector guide

Budget 2014: The sector-by-sector guide

This budget is a mixed bag for small business.

While there is new money to help small businesses access government contracts, the abolition of Commercialisation Australia and other measures designed to assist SMEs is a blow.

The “Restart” scheme for mature age workers comes at the expense of existing schemes, while the Small Business Ombudsman will replace the Small Business Commissioner.

The government has stuck to its promise to cut the company tax rate, but that doesn’t help those small businesses which pay tax as individuals.

The 2014-15 budget will mean some significant changes to a variety of industries.

So how will your industry fare? We’ve pulled together all the changes into a sector-by-sector guide.

Health

Health is one of the biggest losers in this year’s budget, with the government set to cut a combined $80 billion from the health and education sectors by 2024-25 by changing indexation arrangements and removing funding guarantees for public hospitals.

The government said the changes are part of its efforts to remove “unsustainable or ineffective agreements with the states”.

The health sector will also be affected by the government’s decision to introduce a $7 Medicare co-payment for GP visits, with most of the money raised to be invested in a new $20 billion Medical Research Future Fund.

Education

There are some other big changes in store for the education sector as well, with the government announcing a major overhaul of higher education.

University students will likely be hit with higher fees, with universities to be given freedom to set their own fees from 2016.

The government will cut its contribution to the cost of university degrees by an average of 20% from 2016 and students will be required to pay a greater share of the cost of their education. The threshold at which students will be required to pay back their HELP loans will also drop to $50,638. The threshold is currently set at $53,345.

Manufacturing and trade

The manufacturing sector appears to be one of the winners in this year’s budget, with the government fulfilling an election promise to commit $50 million towards the Manufacturing Transition Grants Program, which will aim to help businesses transition to competitive industries.

A further $155 million has been allocated to support regions affected by recent closures of car manufacturers.

Manufacturers could also benefit from the government’s one-off $200 million capital payment to the Export Finance and Insurance Corporation, and a previously announced $50 million boost to the Export Market Development Grants program.

Construction and engineering

Construction and engineering businesses are likely to benefit from the government’s massive infrastructure package, worth $11 billion.

The government said spending on new roads will be its top priority, saying it is “determined to remove transport bottlenecks that constrain Australian firms and cost commuters valuable time”.

The government will spend $3.7 billion of its infrastructure fund on new projects in 2014-15 and has committed $5 billion to provide incentives to state and territory governments to sell assets and invest the proceeds in improving infrastructure.

However, many occupations in the construction industry will likely feel the pain of big cuts to support for apprentices.

Defence

There are also extra funds for the defence industry in this year’s budget, with the government outlining plans to increase its defence spending to 2% of GDP within a decade.

Leading up to the publication of a new Defence White Paper in 2015, the government will bring forward $1.5 billion in defence spending, which was slated for 2017-18.

Tourism

Those in the tourism industry did not fare as badly as expected, with the government choosing not to adopt the National Commission of Audit’s recommendations to slash funding from the sector.

The government has allocated $130 million in base funding for Tourism Australia and $13.5 million for the Asia Marketing Fund in the 2014-15 budget.

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