Video: Treasurer outlines 2019-20 economic budget figures amid pandemic (ABC NEWS)
Scott Morrison will invest $1.5billion in Aussie manufacturing under a new 10-year plan to strengthen the industry which employs 860,000 Australians.
The prime minister will on Thursday outline a new manufacturing strategy to help companies grow and become more competitive internationally as the nation recovers from Covid-19.
Before the pandemic manufacturing was worth $100billion each year and generated more than $50billion in exports.
Mr Morrison believes the industry is crucial to economic growth, particularly in regional areas such the Hunter region of NSW and north and central Queensland.
The government will focus on six areas of manufacturing that Australia is good at which are defence; recycling and energy; space; food and drink; medicine; and resources technology and critical minerals processing.
‘We make things in Australia. We do it well. We need to keep making things in Australia. And under our plan we will,’ Mr Morrison will say.
Companies in those six industries will be able to apply for government grants that must be backed up by private investment to prove they are worthy.
The cash will help companies expand, develop new ideas and access international markets.
The government will also splash $107million on a new Supply Chain Resilience Initiative to make sure Australia is never without crucial supplies after coronavirus left countries scrambling to secure masks and protective gear.
‘The efficiency benefits of hyper-globalisation and highly fragmented supply chains can evaporate quickly in the event of a major global shock like the Covid-19 pandemic,’ the prime minister will say.
‘Armed with this experience, it is only sensible that Australia consider more options to guard against supply chain vulnerability for critical necessities and to secure us against future shocks.’
Hinting at what’s to come in next week’s budget, Mr Morrison will outline the economic environment he wants to create for manufacturing to succeed.
He wants to reduce taxes, decrease regulation and reform industrial relations.
‘You can invest all the resources you like in industry programmes, but if taxes are too high, industrial relations systems are too complicated, the adoption of digital technology is patchy, energy is too expensive, approvals take too long and are too costly, the roads are clogged, employees do not have the right skills, and you are shut out of overseas markets, you are wasting your time,’ Mr Morrison will say.
There is growing speculation that income tax cuts due for 2022 will be brought forward by a year to 2021.
Mr Morrison will hint at this in his speech when he will say: ‘Australians are keeping more of what they earn, as promised. And there will be more.’
The fast-tracked tax cuts would give those earning $120,000 or more $2,565 worth of annual tax cuts from the middle of 2022.
Those earning $90,000 would get $1,215, compared with 2017-18.
Low-to-middle income earners on $50,000 to $80,000 would get $1,080 early while those on $40,000, barely above the minimum wage, would get a $580 cut.
The 32.5 per cent personal income tax bracket is due to be moved from $90,000 to $120,000.