New Government Policy Snapshot –

The widely predicted Coalition victory at the weekend sets us up for a period of greater political certainty, which we all hope will contribute to improving the business environment.

The Prime Minister elect has an ambitious agenda which includes many policies designed to reduce the cost burden on business and listed below are the Coalition’s major policy announcements below.

While some of the headline changes such as the abolition of the carbon tax and the mining tax may have a difficult passage through the existing Senate, predictions are that the new Senate to be installed on July 1, 2014, may be more open to change.

·         Cut company tax by 1.5% from July 1, 2015.

·         Abolish the carbon tax. Removal of the carbon package will also include removal of the Biodiversity Fund, Carbon Farming Future Program and similar measures, together with the abolition of the Climate Change Authority. Funds allocated to the Carbon Capture and Storage Flagships program will be taken back. The Steel Transformation Plan will be discontinued. The Clean Energy Finance Corporation will be abolished. The Clean Technology Program will be discontinued, while honouring existing contracts.

·         Implement Direct Action policy on climate change – establish Emissions Reduction Fund of $2.55 billion over the next four years to fund government purchase of emissions cuts from business and landholders.

·         Abolish the mining tax.

·         Introduce a new Paid Parental Leave scheme providing mothers with 26 weeks paid parental leave, at full replacement wage (up to a maximum salary of $150,000 per annum) or the Federal Minimum Wage, whichever is greater.

·         Remove existing minimum wage PPL scheme with savings diverted to fund proposed Paid Parental Leave scheme.

·         Impose a 1.5% levy on taxable company income above $5m to partly fund the proposed Paid Parental Leave scheme.

·         Reverse changes to the Fringe Benefits Tax on cars. Revert to statutory formula which does not require logbook evidence of car use for business.

·         Prepare a Tax Reform White Paper.

·         Toughened Anti-dumping policy which reverses onus of proof in dumping cases.

·         Conduct a major, fundamental review of Competition Policy.

·         Establish a Commission of Audit which will potentially allow for new savings measures.
Create a One Stop Shop for environmental approvals.

·         Rework the NBN to become a fibre-to-the-node model as opposed to the existing fibre-to-the-premises, subject to a short business strategy review including review of confidential contractual and financial data, and renegotiated deal with Telstra. Planned reprioritisation of rollout schedule to target outer metropolitan and regional areas ahead of inner metropolitan suburbs.

·         Planned later increase in Export Market Development Grants funding.

·         Hold an urgent Gas summit to address East Coast gas supply crisis.

·         Review the R&D Tax Incentive.

·         Restore the Australian Building and Construction Commission (ABCC) as an agency independent of Fair Work Australia, and restore its former powers of compulsion.

Other Workplace Relations policies:

·         Keep and improve the Fair Work laws – including the independent umpire

·         Establish an Independent Registered Organisations Commission to oversee unions and employer associations.

·         Guarantee workers have the right to access fair individual flexibility agreements

·         Create realistic timeframes for Greenfields agreements

·         Ensure union right of entry provisions are sensible and fair

·         Promote harmonious, sensible and productive enterprise bargaining

·         Undertake an independent review of the Fair Work Act by the Productivity Commission

·         Urgently review the Remuneration Tribunal for the trucking industry

·         Implement many recommendations from the Fair Work Review Panel report.

Ø  Introduce the Senior Employment Incentive which provides $190 million in incentive payments to employers who hire and retain workers aged 50 or over.

Ø  Provide mining exploration tax credit of $100 million. Remove payments to coal mines to install methane reduction equipment.

Ø  Cut foreign aid. Reduce rate of aid growth to CPI and indefinitely defer goal of aid budget at 0.5% of GDP.

Ø  Remove increases to Instant Asset Write-Off.

Ø  Abolish loss carryback. Removes ability of business in a loss to claim a tax offset for tax liabilities paid in the two previous financial years.

Ø  Reduction of $500 million in assistance to car industry over four years.

Ø  Additional Public Service efficiency dividend which will include reduction in advertising and consultancies.

Ø  Scrap the reduction of Interest Withholding Tax paid by financial institutions on interest earned by their overseas borrowings to 5% from 2014-15.

Ø  Remove the ability for small business to claim immediate deduction for motor vehicles.

Ø  Defence spending to be set at 2% of GDP by 2023. Will ensure new submarines construction centred on Adelaide.

Ø  Increase funding to upgrade the Bruce Highway.

Ø  Establish a National Stronger Regions Fund of $200 million per annum in competitive grant funding to meet 50% of costs of community building projects. Disadvantaged regions with high unemployment get priority.

Ø  Provide $615 million for the Swan Valley Bypass.

Ø  Provide $500 million for the North South Road upgrade (SA).