• Federal Budget 2021

    The Big Picture

The Big Picture

Next steps following the Royal Commission into Aged Care Quality and Safety

The Government has announced its response to the Royal Commission into Aged Care quality and safety and the availability of aged care services.

Read more  ►

Next steps following the Royal Commission into Aged Care Quality and Safety

The Government has announced its response to the Royal Commission into Aged Care quality and safety and the availability of aged care services, providing a $17.7 billion whole-of-government response across the following sectors:

  • Governance and regional access
  • Homecare
  • Residential aged care quality and safety
  • Residential aged care services and sustainability
  • Workforce.

Governance and regional access

The Government will provide $698.3 million over five years from 2020-21, with the aim of funding governance and regional access to the quality of aged care services for:

  • Consumers in regional, rural and remote areas
  • Replacement of both the Aged Care Act 1997 and the Aged Care Quality and Safety Commission Act 2018
  • Establishment of the National Aged Care Advisory Council to keep the Government informed on the aged care sector.

Home care

The Government will provide $7.5 billion over five years from 2020-21 for home care services. This funding announcement will support:

  • The release of 80,000 additional home care packages over two years from 2021-2022
  • Greater access to respite care services and payments to support carers
  • The continued operation of My Aged Care
  • The needs of senior Australians, including access to information about aged care and the flexibility to design and plan a new home care program.

Residential aged care quality and safety

The Government will provide $942 million over four years from 2021-22 to residential aged care quality and safety as a way to improve access to primary care and other health services in residential aged care. Key improvements to these new payment measures include:

  • Additional investment in digital and face-to-face assistance for ease of navigating the aged care system
  • Addressing failures in care and extending support to manage and prevent COVID-19 outbreaks
  • Strengthening of regulations including the reduction of chemical and physical restraints within the Dementia Behaviour Management Advisory Service and Severe Behaviour Response Teams.

Residential aged care services and sustainability

The Government will provide $7.8 billion over five years from 2020-21 with an outlook of improving sustainability of residential aged care services. Key funding from the Budget includes:

  • Increased front line care delivered to 240,000 aged care residents, and 67,000 who access respite services, by 1 October 2023
  • Continuation of temporary financial support and the Viability Fund to further support residential aged care providers
  • Implementation of the Australian National Aged Care Classification (AN-ACC).

Workforce

The Government will provide $652.1 million over four years from 2021-22 as a catalyst for change in respect of aged care and the workforce to:

  • Grow and upskill the workforce, including enhancing nurse leadership and clinical skills, providing dementia and palliative care training for aged care workers and recruit aged care workers in more regional and rural areas
  • Introduce nationally consistent worker screening, register and code-of-conduct for all care sector workers
  • Support the training of 13,000 new home care workers
  • Extend the Care and Support Workforce national campaign.

BDO Comment

BDO supports the much needed aged care initiatives addressing the gaps in an under resourced aged care system that is struggling to support the needs of our aging population. These measures will also assist with increasing the aged care workforce, with consequent improvements in the unemployment rate.

The question is whether this level of funding is enough.  Our expert commentary considers this further.

Other funding – Industry, Science, Energy and Resources

The Government has announced over $1.2 billion over the next three years for a number of initiatives in the Industry, Science, Energy and Resources portfolio.

Read more  ►

Other funding – Industry, Science, Energy and Resources

The Government has announced over $1.2 billion over the next three years for a number of initiatives in the Industry, Science, Energy and Resources portfolio.

Vaccine development

  • Funding for the Department of Industry, Science, Energy and Resources and the Department of Health to develop onshore mRNA vaccine manufacturing capabilities in Australia, including to work with the Australian market towards achieving sovereign capability.

Resources and energy

  • $58.6 million over four years to support key gas infrastructure projects, unlock new gas supply and empower gas customers. This includes $38.7 million to help alleviate potential gas shortfalls on Australia’s east coast
  • $116.7 million over four years and $14.2 million per year ongoing to support the Australian Nuclear Science and Technology Organisation
  • $20.1 million over two years to deliver a Global Resources Strategy to support diversification of Australia’s resource export markets
  • $215.4 million over six years to support investment in Australia’s energy affordability and reliability, including $24.9 million over three years to support the development of hydrogen ready gas generation infrastructure (with $8.7 million to be funded by reprioritising existing resources)
  • Building on the 2020-21 Budget Measure (JobMaker Plan – securing Australia’s liquid fuel stocks) funding will be committed over a nine year period in an effort to maintain Australia’s refining capacity, thereby working to enhance national fuel security. Funding will include $50.7 million for implementation and administration of the minimum stockholding obligation and broader framework, and will also see to the introduction of a production payment for domestic refiners (funding amounts are not for publication due to commercial sensitivities)
  • Funding over 11 years to conduct rehabilitation works at the former Rum Jungle mine site near Batchelor, Northern Territory
  • An additional $15.7 million over three years to support strategic basin plans. This includes $15.7 million to support gas industry field appraisal trials and $2.2 million to facilitate land use agreements and drive economic opportunities in the Beetaloo sub basin. This measure is being partially funding through the reprioritisation of existing funding from the 2020-21 Budget (Accelerating New Gas Supply to Market – Strategic Basin Plans).

Emissions reduction

Following on from the 2020-2021 Budget, the Federal Government is continuing with its commitment to invest heavily into new and emerging technologies focused on emissions reduction as part of its Technology Investment Roadmap and Low Emissions Technology Statements.

The Government has announced it will provide $1.6 billion over ten years from 2021-2022 across various initiatives to incentivise private investment in low emissions technologies, grow new export industries and create jobs.

Space

  • $13.3 million over four years to the Australian Space Agency to further support the growth of the industry and remove regulatory burden from the private sector
  • $387.2 million over ten years to co-host the Square Kilometre Array (SKA) Observatory. This funding includes Australia’s share of the telescope, the establishment of the Australian SKA Regional Centre, purchasing of land to accommodate part of the telescope, and provision of communication services to the area surrounding the Australian SKA site.

Miscellaneous

  • $189.6 million over five years for the Next Five Year Plan for Northern Australia to stimulate economic recovery and create jobs across northern Australia. This includes $111.9 million to establish a Northern Australia Development Program to support the scale-up of commercial projects, $68.5 million to deliver targeted digital connectivity solutions, and $9.3 million to provide on-ground resources focusing on investment, job creation and business growth
  • $2.6 million over four years to support and strengthen Australian business participation in Commonwealth procurement. This includes the mandated use of Dynamic Sourcing for Panels, targeted Government Procurement Learning Events, increased communication of opportunities, and a pilot of direct engagement of SMEs by the Department of Industry, Science, Energy and Resources for contracts up to $200,000
  • $1 million over two years to support the growth of the Australian fashion industry through promoting demand creation and increased recognition of the innovation and design capabilities of the Australian fashion industry
  • $5 million over four years to simplify Australia’s anti-dumping regime for businesses
  • $2.4 million over three years to support the Kimba community under the National Radioactive Waste Management Facility program
  • Consolidation of international science funding programs, saving $6.6 million over five years and $500,000 per year ongoing.

BDO Comment

BDO welcomes the additional funding under the Industry, Science, Energy and Resources portfolio and the additional funding for Regional Australia. We would, however, prefer to see funding distributed more broadly across the portfolio to reach more sectors than just the resources and energy industry.

JobTrainer and housing

The Government has announced substantial expenditure on two significant programs in a bid to continue Australia’s recovery from the COVID-19 pandemic - $506 million pledged towards the continued functioning of the JobTrainer Fund, and over $782 million to expand the operation of the HomeBuilder Grant.

Read more  ►

JobTrainer and housing

The Government has announced substantial expenditure on two significant programs in a bid to continue Australia’s recovery from the COVID-19 pandemic - $506 million pledged towards the continued functioning of the JobTrainer Fund, and over $782 million to expand the operation of the HomeBuilder Grant.

JobTrainer

The JobTrainer Fund was initially established as an investment measure to combat the employment issues arising from the COVID-19 pandemic. It operates on a state-by-state basis, with a goal to upskill younger, under-employed members of the workforce. $506 million will be spent over two years from 2021-22 to provide 163,000 training places in industries of critical importance. In particular, aged care and digital skills will be prioritised, in alignment with the budget’s emphasis on these industries.

To fulfil eligibility requirements, applicants must not be older than 24, and must also be unemployed or receiving income support payments. Additionally, the announcements outline eligibility will be expanded to include employed individuals in industries most heavily impacted by COVID-19.

HomeBuilder

The HomeBuilder Grant has been a popular measure since its announcement in 2020, with over 120,000 applications made before its initial closing deadline of 14 April 2021. The Grant is designed to support the residential construction industry, and provide a more accessible avenue for home ownership in Australia. The Treasurer has announced the reopening of this Grant, supported by $774 million of funding over two years. The construction commencement requirement has been extended from six months to 18 months, which will widen the number of eligible applicants.

Additionally, the expansion of the Family Home Guarantee will provide 10,000 further places to allow single parents with dependants to enter the housing market. This program will allow eligible parties to access deposits as low as 2%. Also, expansion of the New Home Guarantees program will allow 10,000 eligible first home buyers to either build new homes, or purchase newly constructed homes with deposits as low as 5%.

BDO Comment

BDO supports these measures. The HomeBuilder Grant has been one of the most successful and popular initiatives in recent times, and provides more Australians with the opportunity to enter a booming property market. Its expansion will continue to aid the recovery of the residential construction industry.

The education and up-skilling of younger members of the workforce has been touted as a priority by the Government, and the continued support of the JobTrainer Fund will provide the means to this end. The particular focus on providing training places in both aged care and digital industries aligns with the other budgetary objectives outlined in this year’s announcements.

Additional funding for the JobMaker Infrastructure Investment Plan

The Federal Government has committed a further $15.2 billion in additional infrastructure funding across the country as part of its ongoing $110 billion, ten year JobMaker Infrastructure Investment Plan. The funding will support key infrastructure projects with a focus on improving roads and freight networks. It is estimated the increased investment in infrastructure will create 30,000 jobs across every State and Territory.

Read more  ►

Additional funding for the JobMaker Infrastructure Investment Plan

The Federal Government has committed a further $15.2 billion in additional infrastructure funding across the country as part of its ongoing $110 billion, ten year JobMaker Infrastructure Investment Plan. The funding will support key infrastructure projects with a focus on improving roads and freight networks. It is estimated the increased investment in infrastructure will create 30,000 jobs across every State and Territory.

State and Territory measures

Queensland

The Government will commit a further $1.6 billion to prioritising regional and urban road and rail infrastructure projects in Queensland. The additional funding will be allocated to key projects such as:

  • $400 million in additional funding for the Bruce Highway
  • $400 million for the Inland Freight Route (Mungindi to Charters Towers)
  • $240 million for the Cairns Western Arterial Road Duplication.

New South Wales

New South Wales will receive an additional $3.3 billion in funding from the Government. This additional spending will help fund key projects including:

  • $2 billion for the Great Western Highway Upgrade – Katoomba to Lithgow
  • $500 million for the Princess Highway Corridor
  • $240 million for the Mount Ousley Interchange.

Australian Capital Territory

The Government will provide a further $167.3 million for key projects in the Australian Capital Territory including:

  • $132 million for the Canberra Light Rail – Stage 2A
  • $26.5 million for the William Hovell Drive Duplication.

Northern Territory

The Northern Territory will receive an additional $323 million in funding for priority road and rail projects. Key projects as part of the additional funding include:

  • $173 million for Northern Territory Gas Industry Roads Upgrades
  • $150 million for the Northern Territory National Network Highway Upgrades. 

South Australia 

South Australia will benefit from an additional $3.2 billion in funding bringing the Government’s total commitment to over $10.7 billion. The increased spending on major infrastructure will include:

  • $2.6 billion for the North-South Corridor – Darling to Anzac Highway
  • $161 million for the Truro Bypass.

Western Australia

The Government will provide an additional $1.3 billion in road and rail funding. The additional funding will focus on key projects such as:

  • $237 million for the METRONET
  • $200 million for the Great Eastern Highway Upgrades
  • $160 million for the WA Agricultural Supply Chain Improvement.

Victoria

The Government will allocate a further $3 billion in funding for a variety of road and rail projects in Victoria. Spending on major infrastructure upgrades will include:

  • $2 billion for the Melbourne Intermodal Terminal
  • $380 million for the Pakenham Roads Upgrade
  • $250 million for the Monash Roads Upgrade.

Tasmania

The Government will provide an additional $322.6 million in funding for priority road projects in Tasmania including:

  • $113.4 million for the Midland Highway Upgrades, including Campbell Town North and Oatlands
  • $80 million for the Tasmania Roads Package.

BDO Comment

BDO welcomes the Government’s increased commitment to infrastructure projects across the country. The increase in funding will help assist in supporting the economic recovery and drive jobs growth in the construction sector. This will provide flow-on economic benefits to a number of struggling Australian industries such as the tourism and transportation sectors.

Child Care Subsidy

Included in the Women’s Economic Security Package are changes to the Child Care Subsidy (CCS) – the aim of which is to improve women’s workforce participation and economic security. These changes will come into effect on 1 July 2022. But be warned, the changes don’t apply to everyone.

Read more  ►

Child Care Subsidy

Included in the Women’s Economic Security Package are changes to the Child Care Subsidy (CCS) – the aim of which is to improve women’s workforce participation and economic security. These changes will come into effect on 1 July 2022. But be warned, the changes don’t apply to everyone.

CCS changes

Families will keep more money in their pocket with the CCS rate increasing by 30% for children five years and under. However, these changes only apply to a family’s second and subsequent children, meaning single children families will miss out. The CCS increase is capped at a maximum of 95%.

The $1.7 billion dollars’ worth of funding over five years will also abolish the $10,560 annual subsidy cap for high income earners. It is hoped the removal of the subsidy cap for high income families will encourage both parents back into full time work.

BDO Comment

BDO welcomes the changes aimed to support women in the workforce. However, with the start date more than 12 months away, little relief will be gained in the short term.

Digital Economy Strategy

The Government has introduced a $1.2 billion Digital Economy Strategy aimed at taking advantage of the accelerated digital transformation resulting from COVID-19. As part of this strategy, it has introduced a 30% refundable Digital Games Tax Offset to make Australia an attractive destination for digital talent.

Read more  ►

Digital Economy Strategy

The Government has introduced a $1.2 billion Digital Economy Strategy aimed at taking advantage of the accelerated digital transformation resulting from COVID-19. As part of this strategy, it has introduced a 30% refundable Digital Games Tax Offset to make Australia an attractive destination for digital talent.

Digital Games Tax Offset

From 1 July 2022, eligible entities spending a minimum of $500,000 on qualifying Australian games expenditure, will receive a 30% refundable tax offset, capped at $20 million per year. Consultation with industry in mid-2021 will inform the criteria and definition of qualifying expenditure to support the development of digital games.

Other digital priorities

The Government’s Digital Economy Strategy also includes additional support for the following areas:

  • Improving digital infrastructure and skills: Recognising the need for specialist skills in emerging fields such as artificial intelligence, robotics and quantum computing
  • Artificial Intelligence (AI) capability: The Government will create a National AI Centre and Digital Capability Centres to drive and support small and medium enterprises to adopt and use transformative artificial intelligence technologies
  • Emerging aviation technologies: Establishing the Emerging Aviation Technology Partnerships program will allow the Government to support the use of emerging aviation technologies, benefitting regional economies and communities. Additionally, the New Drone Rule Management System will support the automated management of Commonwealth and state drone regulations.

BDO Comment

The Digital Games Tax Offset will be very beneficial for many Australian gaming entities, but it is important entities carefully assess the interactions with other schemes, such as the R&D Tax Incentive, and how this will affect their ultimate tax position.

BDO is pleased the Government has increased its support of Australia’s digital economy without heeding the call from some in the tech sector to fast track a specialised software incentive. BDO believes the sector can be appropriately accommodated under the existing Research and Development Tax Incentive regime if it is properly administered, with specialised schemes like the Digital Games Tax Offset, a bonus, where required.

Victims of family and domestic violence

The Government will provide funding from 1 July 2021 for initiatives to reduce and support the victims of Family, Domestic and Sexual Violence (FDSV) against women and children. Further, the Government announced it will not proceed with a measure to extend early release of superannuation to victims of family and domestic violence.

Read more  ►

Victims of family and domestic violence

The Government will provide funding from 1 July 2021 for initiatives to reduce and support the victims of Family, Domestic and Sexual Violence (FDSV) against women and children. Further, the Government announced it will not proceed with a measure to extend early release of superannuation to victims of family and domestic violence.

Early superannuation release for victims of family and domestic violence

The Government’s previous measure, announced in an attempt to help victims of family and domestic violence, allowed women to withdraw up to $10,000 from their superannuation accounts. In this Budget, the Government has announced it will not proceed with the measure to extend early release of superannuation to victims of family and domestic violence.

Women’s safety

As part of the National Plan currently being developed, the Government has announced it will provide $998.1 million over four years from 2021-22, plus $2.3 million in 2025-26, for initiatives to reduce and support the victims of FDSV.

Programs and initiatives that directly support women and children who are victims of FDSV

Funding of $507.3 million over four years from 2021-22 will be provided to implement and enhance a range of programs and initiatives directly supporting women and children who have been subjected to FDSV.

Programs for prevention of FDSV and education

Funding of $92.4 million will be provided over four years to support programs aimed at the prevention of FDSV, to support education on consent and respectful relationships and to improve training outcomes for those who may encounter FDSV.

Support services

Funding of $320.1 million over four years will be provided to further support services assisting vulnerable women and children to engage with the legal system, increase access to Children’s Contact Services and support the development of improvements in the legal system in dealing with FDSV.

Improvement of data collection

Funding of $80.6 million over five years will be provided to improve data collection and to further enhance research capability into FDSV to better support the development of future policy responses including the development of the next National Plan to reduce FDSV in Australia.

BDO Comment

In light of recent allegations of the poor treatment of women in Federal Parliament and more generally, it was no surprise the Government announced significant spending to tackle this issue. This in no way takes away from the fact these spending measures are very welcome. We consider these measures are a great start in helping to protect the vulnerable.

We support the removal of the proposal to allow domestic violence victims to access their superannuation funds early. We believe this proposal had the potential to further disadvantage women, as those escaping domestic violence situations should not have to use their own funds to do so.