What businesses should know about the 2022 Australian federal election

It is impossible to miss the fact that the Australian federal election 2022 will be held on 21st May which, incidentally, is my son’s birthday. It is not a big focus for a 14 year old, it must be said.

Nevertheless, as the rest of us are being bombarded with news of the major parties’ campaigns, leaders’ debates (screaming matches), and the respective parties policy announcements as the date draws near, we at Bentleys felt it’s time to cut through the noise and distil the policies announced and election promises made thus far, especially where they affect business.

As such, detailed below, I have tried to highlight some key points for business, and this may give an indication to which side the coin will fall on the 21st.

Coalition’s main policies and election promises

   
Focus on business
Employee training• Employee training tax incentives for small business.
• $3.7 billion to support new training positions.
• $2.8 billion additional incentives for apprenticeships and trainees.
• 70% of incoming migrants to be skilled stream places.
Manufacturing• $2.5 billion Modern Manufacturing Strategy.
• $2.2 billion to support university innovation and industry collaboration.
Infrastructure• $120 billion 10-year infrastructure investment pipeline.
Digital economy• Small business tax incentives for embracing digital economy.
• $1.1 billion to support Digital Economy Strategy, including technology investment boost and Quantum Commercialisation Hub.
Climate change• Reduce carbon emissions by 26-28% by 2030, net zero by 2050.
• $22 billion investment in renewables and low-emissions energy technology.
• Electric vehicle charging stations – 50,000 in Australian homes, 400 in businesses and 1,000 on roads (but no funding details).
The wider electorate
Personal income tax relief• $16 billion in low and middle income tax relief in 2022-23
• Further tax relief from 1st July 2024.
Low unemployment• Create 1.3 million more jobs in next five years.
Health• $525 million to lower the threshold for the PBS Safety Net
• $27.2 billion for public hospitals in 2022-23, growing to $32.7 billion in 2025-26
Housing affordability• Increase Home Guarantee Scheme (government guarantees up to 15% of each first-home-buyer loan) to 35,000 loans annually.
• Additional $2 billion in low-cost financing for social and affordable dwellings.
Childcare• No annual cap on subsidies
• Continuation of up to 85% subsidy for first child, 95% for second child.

 

Labor’s main policies and election promises

   
Focus on business
Training, skills and education• Fee-free TAFE to target skills gap, plus 20,000 extra university places.
• Apprentices boost for government projects.
• Jobs and Skills Australia: vocational education and training partnership of employers, unions and education sector.
• Teacher training grants up to $48,000 for students with an ATAR of 80 or over.
Wages• Support for lifting minimum wage by 5.1%.
• New ‘same job, same pay’ laws.
• Amend Fair Work Act to enshrine job security.
• Wage theft to be made a major crime.
• Push to close gender pay gap.
Manufacturing• • $15 billion investment in job-creating projects in resources, agriculture, transport, medical science, defence, renewables and low emissions technologies.
• Buy Australian Plan for government projects.
• Expansion of full-fibre NBN access.
Climate change• Reduce carbon emissions by 43% by 2030, net zero by 2050.
• National Electric Vehicle Strategy, including purchase discount and 117 fast charging stations on highways.
• Hydrogen refuelling stations on freight routes.
Defence• Maximise local content in defence spending.
• Continue with government defence spending commitments of $270 billion in next 10 years.
The wider electorate
Health• Incentives and improved training to support recruitment of health professionals in rural areas.
• 50 Medicare Urgent Care Clinics, to take pressure off emergency departments.
• Cut cost of PBS co-payment by $12.50 to $30 maximum.
Cheaper child care• Lift maximum subsidy rate to 90% for first child.
• Higher rates for families earning less than $530,000.
Housing affordability• 10,000 places annually in Help to Buy scheme, where Federal Government takes up to 40% equity in homes purchased by Australians earning up to $90,000 ($120,000 for couples).
• 20,000 more social housing properties in next five years.
• 10,000 affordable homes in next five years for essential workers like police and nurses.

Key issues for business regardless of who wins

The Coalition’s policies clearly provide more specific detail on business incentives, Health, Infrastructure, and industry assistance, especially in the area of defence industries. The Coalition has a strong track record of financial management, particularly through the challenging times of the past five years. As we head to more inflationary times, the coalition will be banking on the public wanting to keep an experienced government running the Treasury, almost regardless who the leader is (particularly as we have a habit of changing leaders mid-term). Concerns of inflation running out of control will be significantly front of mind for many business leaders.

On the other hand, some business leaders may be attracted by Labor’s slightly more ambitious carbon emission reduction targets and the Buy Australian Plan, while shying away from its support for a 5.1% minimum wage increase. The unproven economic management record of the opposition will worry some.

In the final analysis, what’s good for members of the wider electorate is usually also good for the businesses who employ them. The Coalition emphasises its economic management credentials, infrastructure, jobs, tax relief and defence, while Labor’s focus is on health, jobs, childcare, local manufacturing and renewables. Interestingly, the pulse of voters under 30 is that they have a real focus on decarbonisation and the long-term future of the planet, which neither party has covered themselves in glory on.

The Australian electorate has a habit of liking a change of government every now and then to ‘keep the bastards honest’ (apologies to Don Chipp), which would favour Labor, but these uncertain economic headwinds we will be facing would favour a known steady hand at the wheel, which would favour the Coalition. We will need to wait until 21st May to know the outcome of the Australian federal election 2022, and find out what really matters to the majority of voters. Hung parliament anyone?


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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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