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15/05/24

2024-25 Federal Budget Summary

Last night the Treasurer the Hon. Dr Jim Chalmers MP handed down the Federal Budget for 2024-25. The Australian Hotels Association and Accommodation Australia were present in yesterday’s Budget Lock-Up.

OVERVIEW

This section provides a general overview of the major announcements relevant to the licensed hospitality and accommodation industry. 

This budget has a strong focus on cost-of-living, housing, Future Made-in-Australia and strengthening Medicare. Overall you could describe it as a bit underwhelming for our industry. 

Key measures relating to hospitality, accommodation, and Tourism:

  1. 2024-25 planning levels – the government has lowered the permanent migration planning levels to 185,000 (from 190,000 this year)
  2. $325 energy rebates for over one million small businesses
  3. Instant asset write off - extending the $20,000 instant asset write-off by 12 months until 30 June 2025.
  4. Apprentice employer Incentives – replace some of the funding which was due to be reduced from 30 June.  This will benefit chef apprenticeships but unlikely to help traineeships
  5. Promotion of VET - $4.4 million in 2024–25 to promote the appeal of VET for students, parents and teachers
  6. No increase in visa fees – but a pre-application ballot charge of $25 has been introduced for WHM from China, Indian and Vietnam to manage the cap
  7. Tourism Australia funding has been maintained (but not increased)
  8. No changes to the alcohol excise regime or the WET

BUDGET MEASURES DETAILED

Home Affairs

  1. Migration Program – 2024-25 planning levels

The Government has set the 2024–25 permanent Migration Program planning level at 185,000 places and allocate 132,200 places (around 70 per cent) to the Skill stream.   The 70% level is the same as for 2023-24 but this means the total number of skilled visas is less.   This is below the number sought by AHA/AA. 

From 2025–26, the Government will extend the planning horizon for the permanent Migration Program from one year to four year which was signalled in the migration strategy released in December last year.

  1. Work & Holiday Maker visa – pre application charge

A new visa pre-application (ballot) process for the capped Work and Holiday (subclass 462) visa program for China, Vietnam and India will be introduced from 2024–25. The ballot process will help to manage program demand and application processing times for these countries which have capped numbers. A ballot charge of $25 (indexed to the Consumer Price Index in future years) will apply. This measure is estimated to increase receipts by $4.0 million and increase payments by $1.0 million over the 5 years from 2023–24.

Jobs and Skills

  1. Apprenticeship Incentive

$265.1 million over four years from 2024–25 to adjust previously scheduled Phase Two Incentive System payments to provide further support for apprentices, trainees and their employers in priority occupations, while the Government undertakes the Strategic Review of the Australian Apprenticeships Incentive System. Under 2022–23 March Budget arrangements for the Australian Apprenticeships Incentive System, financial support to apprentices, trainees and their employers was scheduled to reduce from 1 July 2024, including for those in priority occupations, through the implementation of Phase Two settings. The measure will increase Phase Two Incentive System payments for apprentices in priority occupations from $3,000 to $5,000 and hiring incentives for priority occupation employers from $4,000 to $5,000 for 12 months from 1 July 2024.  This is likely to be of assistance for apprentice chefs but is unlikely to reintroduce incentives for hospitality traineeships due to discontinue on June 30.

  1. Employment Services

$68.6 million over five years from 2023–24 to increase resourcing for the Digital Services Contact Centre to support people using Workforce Australia Online services ,  $32.1 million over four years from 2024–25 for the Real Jobs, Real Wages pilot providing tapered payments to employers to support wages for people at risk of long-term unemployment and $21.9 million over five years from 2023–24 to provide paid employment placements through social enterprise and employer partnerships for people with high barriers to work. 

As a savings measure the workforce specialist services will cease saving $58.8 million over five years.  The employment fund available to providers to support the unemployed will also be reduced by $100 per new participant on the caseload, saving $53.9 million over four years. 

  1. Additional support for vocational education and training

The Government will provide $26.1 million over four years from 2024–25 for the Skills and Training portfolio to contribute to a strong and effective Vocational Education and Training system, continue structural reforms, and maximise returns on previous skills and training investments and commitments. Funding includes:

  • $10.6 million over four years from 2024–25 (and $1.0 million per year ongoing) for the implementation of a reporting solution for the Australian Skills Guarantee
  • $9.5 million in 2024–25 in additional funding for Jobs and Skills Australia’s continued provision of advice on Australia’s labour market, skills and training needs
  • $6.1 million in 2024–25 in additional funding for the National Careers Institute to continue its role in supporting Australians to access targeted careers information
  • $2.9 million in 2024–25 in reprofiled funding for continued implementation work with the states and territories on the 5-year National Skills Agreement that commenced on 1 January 2024.
  • The Government will also progress a business case to develop a modern ICT solution for the assessment of trade skills for skilled migrants by Trades Recognition Australia. A modern ICT solution will make skilled workers more rapidly available to employers and support delivery of the Government’s migration and skilled workforce objectives.
  1. Promoting VET and TAFE pathways

$4.4 million in 2024–25 to drive demand for Vocational Education and Training (VET) in support of delivering the workforce required to meet Australia’s future skills needs. This will include delivering strategic communications to increase the appeal of VET for students, parents and teachers, and extending community awareness of Fee-Free TAFE courses in areas of high skills needs which has ensured strong uptake of Fee-Free TAFE places to date.

  1. Workplace Relations

$111.8 million over four years from 2024–25 (and $12.4 million per year ongoing) to support the Government’s workplace relations agenda. Additional funding includes:

  • $60.0 million over four years from 2024–25 to increase the Productivity, Education and Training Fund to support practical activities by employer and worker representatives to boost workplace productivity and engage in tripartite cooperation. This will also support workplaces to implement policy changes such as the introduction of payday superannuation, although traditionally this money goes to the peak groups only, ie. ACTU, ACCI, AiGroup etc.
  • $27.5 million over four years from 2024–25 (and $7.0 million per year ongoing) to enable the Office of the Fair Work Ombudsman to continue targeting non-compliance with the Fair Work Act 2009 by large corporate employers
  • $20.5 million over four years from 2024–25 (and $5.1 million per year ongoing) to boost funding for the Office of the Fair Work Ombudsman to support small business employers to comply with recent changes to workplace laws
  • The Government will also recalibrate the Fair Entitlements Guarantee Recovery Program to pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024. This will achieve efficiencies of $13.0 million over four years from 2024–25 (and $29.9 million over the medium term) through an expected increase in tax receipts of $63.1 million over four years from 2024–25 (and $114.4 million over the medium term), with $44.4 million over four years from 2024–25 (and $96.9 million over the medium term) expected to be paid to superannuation funds.

Small Business

  1. Small Business – instant asset write-off

The Government will continue to improve cash flow and reduce compliance costs for small businesses by extending the $20,000 instant asset write-off by 12 months until 30 June 2025.

Small businesses, with an aggregated annual turnover of less than $10 million, will continue to be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025. The asset threshold applies on a per asset basis so small businesses can instantly write off multiple assets.

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

  1. Small Business - Energy

The Government will provide approximately $325 million in energy bill relief to small businesses through the Energy Bill Relief Fund. From 1 July 2024, the Commonwealth will deliver rebates of $325 to around 1 million small businesses.

  1. Small Business – Paid Parental Leave

The Government will provide $10 million over two years from 2024–25 to provide additional support for small business employers in administering PPL.

  1. Small Business – Cyber Security

The Government is supporting small businesses to be secure online while they adopt and harness digital opportunities, including through:

  • $23.4 million for the Cyber Wardens program to provide free, online training for small business owners and their staff to help drive cultural change and a cyber safe mindset in Australian small businesses
  • $11.1 million for the Small Business Cyber Resilience Service to help small businesses build their cyber resilience and provide support when affected by a cyber incident
  • $7.2 million for the Cyber Health Check online interactive tool to enable small and medium businesses to self-assess their cyber security maturity.

The Government is also developing a ransomware playbook to provide guidance to businesses and individuals on how to prepare for, respond to and recover from a ransomware or cyber extortion incident.

Tourism and Live Music

  • Tourism Australia funding effectively maintained at similar levels - $150.2 million for Tourism Australia in 2024-25 compared with an estimated appropriation for this year of $148.3 million.  With external revenue sources, total agency resource will be $190.96 million compared with $192.8 million for this year. 
  • $8.1 million over four years from 2024–25 (and $2.5 million per year ongoing) to administer the Approved Destination Status scheme to support Chinese tourists travelling to Australia in guided groups
  • $8.6 million in 2024–25 for Revive Live to support Australian live music venues and festivals showcasing Australian bands and artists, including to improve accessibility and inclusion at live music performances

Alcohol and Gambling

  1. Alcohol Excise Revenue over the Forward Estimates

Total alcohol excise receipts (beer, spirits, and other including brandy and RTDs) are forecast to grow by 15.4% over the forward estimates, from $8.1Bn in 2024/25 to $9.35Bn in 2027/28.

This growth is in line with the inflation projections contained in the Budget, which implies no change to the current tax settings going forward.

Wine Equalisation Tax receipts are also forecast to grow, from $1.15Bn in 24/25 to $1.34Bn in 27/28.

  1. New classifications for computer games with gambling-like content

The Government will provide $1 million over two years from 2024–25 to fund education and awareness of new mandatory minimum classifications for gambling-like content in computer games.

The new classifications mean that from September, computer games containing in-game purchases linked to elements of chance – such as paid loot boxes – will receive a minimum classification of M (Mature – not recommended for children under 15 years of age), while games containing simulated gambling will receive a minimum classification of R 18+ (legally restricted to adults aged 18 or older)

 

 

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