Budget 2022: What’s in it for the construction sector, business owners and tradies

Every year, the Federal Government spends big on infrastructure and this year, it is no different. In the Federal Budget recently handed down on Tuesday, March 29, the Federal Government has committed another $17.9 billion to infrastructure projects right across the country as part of its rolling 10-year infrastructure investment pipeline.

As a result, the pipeline will increase in value to a whopping $120 billion.

In addition, the Federal Government has promised multiple support and tax cuts for businesses and individuals alike, to help drive down cost of living and business operation.

Here are the key Budget measures that mattered to the construction industry and its workers.

In the Budget 2022-23, the Federal Government has announced a further $17.9 billion will be invested in new infrastructure projects around the country.

This number brings the Government’s 10-year infrastructure spending to $120 billion. An extra 40,000 extra jobs are expected to be created from the new commitments, on top of 120,000 being supported by projects currently underway.

A significant chunk of the money, more specifically $7.1 billion, will go towards ‘turbocharging’ regional economies, in a bid to build next generation export hubs in four key regional hubs.

The regional investment will be targeted at strategic infrastructure projects that drive economic and jobs growth in existing and emerging industries. Funding will focus on connecting infrastructure and developing supply chains to ensure long-term economic and national security.

The four key regions include the Northern Territory, North and Central Queensland, the Pilbara region in Western Australia and the Hunter region in New South Wales.

In addition to the regions, the Government’s key new infrastructure projects are:

In response to soaring house prices making housing affordability seemingly impossible in a lot of regions across the country, the Government is expanding its Home Guarantee schemes to help more Australians achieve home ownership sooner.

There are three schemes on offer - First Home Guarantee, Family Home Guarantee and a newly announced Regional Home Guarantee.

Under the schemes, which guarantee part of the eligible applicant’s loan, home buyers are able to purchase a home with a deposit of as little as two per cent, allowing them to get their foot in the market sooner and easier.

The First Home Guarantee scheme is available to first home buyers only and applies to both new and existing homes. It allows home buyers to purchase a house with a deposit of as low as five per cent.

The Family Home Guarantee scheme, announced in last year’s Budget, is available to single parents with children and dependents who wish to buy a home with a deposit of as little as two per cent.

A new Regional Home Guarantee is available to eligible homebuyers, including non-first home buyers and permanent residents, to purchase or build a new home in regional areas.

In Tuesday’s Budget, the Government has announced an extra 50,000 places this year alone for the schemes combined, giving more home buyers the chance to purchase their dream home.

The breakdowns are:

With support for home buyers increased, the home construction industry, which has been on a streak lately although dampened briefly by lockdowns last year, is expected to continue booming.

As part of a range of measures introduced in 2020 to boost employment, the Government has been subsidising 50 per cent of eligible apprentice’s wages (for a duration of 12 months for each apprentice), regardless of geographic location, occupation, industry or business size.

The popular measure has been extended and expanded several times and was most recently given an expiry date of June 30, 2022.

In September last year, a separate measure, entitled Completing Apprenticeship Commencements (CAC), was introduced to provide wage subsidies for the second and third years of an apprenticeship albeit at a lower rate (10 per cent in second year and five per cent in third year).

A new measure titled the Australian Apprenticeships Incentive System, introduced in the recent Budget, will commence on July 1, 2022, meaning employers taking on new apprentices on July 1, 2022 or later will be subsidised under this new scheme.

The new system, while much less generous to employers compared to the initial scheme, still continues to subsidise new or recommencing apprentices albeit at a lower rate and has a three tier system based on a Priority Occupations List and geographical location.

Dependent on the occupation or location, employers get a wage subsidy of up to 15 per cent for the first year, and lower subsidies in the following years.

As part of the program, apprentices will also receive support payments and allowances for the duration of their apprenticeships.

In addition, The Government has also committed $38.6 million over four years to provide additional support for women who commence in eligible trade occupations on the Australian Apprenticeships Priority List that have had historically low rates of female participation.

The support that will be available, that is non-financial, includes personalised advice and information on career options and apprenticeships pathways, pastoral care, career and industry mentoring, access to professional networks and entrepreneurship training.

Read our full story on the Australian Apprenticeships Incentive System for more details.

Business owners with businesses turning over less than $50 million a year will be eligible for a range of new tax offsets to help digitalise their businesses and upskill staff.

Eligible businesses will be able to able to claim a bonus 20 per cent deduction for the cost of expenses and depreciating assets, up to $100,000 of expenditure per year.

Eligible expenditure includes items such as portable payment devices, cyber security systems and subscriptions to cloud-based services.

The boost will apply to expenditure incurred from March 29, 2022, until June 30, 2023.

Small businesses will also be able to claim a bonus 20 per cent deduction for the cost of external training courses delivered to employees in Australia or online, by providers registered in Australia.

This boost will apply to eligible expenditure incurred from Budget night until June 30, 2024.

This is not just a measure that will affect the construction sector, but almost every sector and individual in Australia relying on diesel or petrol-powered machinery and equipment.

Due to Russia’s invasion of Ukraine, fuel prices worldwide have soared and motorists have been feeling the pinch.

As a result, the Government is halving the fuel excise for six months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.

Fuel prices are expected to lower within weeks.

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