7th October, 2020

Federal Budget 2020: Manufacturing, infrastructure and regional revival in the works

The Federal Budget includes a host of measures to stimulate all levels of the economy, including manufacturing, infrastructure and the regions.

It isn’t just the Government’s new write-off provisions or tax cuts that have businesses happy tonight. The Government has introduced a raft of measures for manufacturing to the tune of $1.3 billion — along with benefits for regional areas as well.

Infrastructure is also getting a huge push in the Federal Budget, with more than $14 billion in new and accelerated projects.

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The plan to revive Australian manufacturing

In one of the more significant changes brought on by the pandemic, the Australian Government is now considering how to revive its manufacturing industry in a funding splash announced in the week prior to the Budget announcement.

In it, the plan outlines $1.3 billion in manufacturing to target six key areas:

  • Food and beverage manufacturing
  • Resources technology and critical minerals processing
  • Medical products
  • Recycling and clean energy
  • Defence industry
  • Space industry

The “Modern Manufacturing” plan focuses on growth. In particular, the Government says the plan is to invest in projects that “improve collaboration between businesses, researchers and investors”.

“This plan is built on the JobMaker platform of enabling our manufacturing businesses to be globally competitive through cheaper and more reliable energy,” Treasurer Josh Frydenberg said in his Budget speech.

A big part of this push is the Manufacturing Modernisation Fund, which (among other things) aims to assist shovel-ready investments in innovative technologies and processes.

If you’re a forward-thinking manufacturer, there’s a lot to like here.

Infrastructure investments cross the country

The 10-year infrastructure pipeline contained in the Budget may be nothing surprising, but the support for more than 100,000 jobs will have a very real impact.

Among the $14 billion in new spending (predicted to create 40,000 jobs), projects include:

  • The Singleton Bypass and Bolivia Hill Upgrade in New South Wales
  • The upgrade of the Shepparton and Warrnambool Rail Lines in Victoria
  • The Coomera Connector in Queensland
  • The Wheatbelt Secondary Freight Network in Western Australia
  • The Main South Road Duplication in South Australia
  • The Tasman Bridge Upgrade in Tasmania
  • The Carpentaria Highway Upgrades in the Northern Territory, and
  • The Molonglo River Bridge in the Australian Capital Territory

The Federal Government is also spending $1 billion to help local councils make immediate upgrades to local roads, footpaths and street lighting.

A recovery for regional Australia

Hit hard by the bushfires and flooding long before COVID-19 arrived on our shores, Australia’s regions have been doing it tough for a while and their recovery is also critical to the entire economy’s future.

Among the Budget initiatives, projects for regional Australians include:

  • $2 billion in concessional loans to help farmers overcome the devastating drought
  • $350 million to support regional tourism to attract domestic visitors back to the regions and a further round of the Building Better Regions Fund
  • $317 million for Australian exporters to continue to access global supply chains, building on the 80,000 tonnes of exports we have already helped get to market
  • $2 billion in new funding for water infrastructure

READ: Federal Budget Wrap — Jobs, skills and more help businesses ‘fight back’

$107 million for supply chain resilience

The emphasis on supply chain resilience and $107 million Budget allocation to match will provide manufacturing businesses in securing their operations.

The uptake of digital tools to enhance connectivity, accuracy and productivity play a fundamental role in supply chain and general business resiliency, and so digitising the business platform should be priority number one for the successful scale of the manufacturing industry.

By way of example, the MYOB Advanced Manufacturing Edition provides features specifically designed for the industry to allow accurate pricing, cost management and financial tracking.

While these projects may not have the universal impact of tax cuts, or the Instant Asset Write-off, they will provide real businesses with real support, and create real jobs for the future — which is what our national recovery needs.