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Budget 2012: Gains and pains for the industry

With an eye on the polls the government appears to have set out a relatively pain-free budget. But what's in the fine print for industry?

New innovation centre for Australian manufacturing
A new $29.8 million Manufacturing Technology Innovation Centre is expected to bring together researchers and manufacturers to drive innovation through new and improved industrial products and processes.

The new Manufacturing Technology Innovation Centre will create, foster and leverage innovative Australian industrial design, engineering and product development, including through the spread of leading edge technologies, business processes and technical knowledge.

Skills Training
Retain $15.6 billion investment in skills and training over the next four years. The Government will also invest $18.1 million over four years to establish three Australian Skills Centres of Excellence in partnership with industry and training organisations.

The new centres aim to establish benchmarks of teaching practice and performance in selected fields of vocational education. Commonwealth funding will be supplemented by co-investment from industry or state and territory governments.

Workforce Support
An investment of almost $55 million over four years to train more Australians to meet the future skills needs of the new economy.

A $35 million investment will support mature age workers to reskill or upskill, with a further $19.4 million funding to provide training to newly qualified tradespeople to help them establish their own businesses.

The new $35 million funding will be available from 1 January 2013 for businesses to provide training to new and existing workers aged 50 years and over. It is expected that at least 7260 mature age workers will benefit from this measure.

Employers hiring mature age workers for three months will be given a $1000 bonus.

However, the Government will discontinue the $1500 standard employer commencement incentive payment for existing worker Australian Apprentices in non-National Skills Need List occupations but increase the standard completion incentive by $500 to $3000. New employee Australian Apprentices and existing workers in National Skills Need List occupations will not be impacted by this change.

Tax reforms for small business
Provision of $27.5 million to extend the Small Business Advisory Service (SBAS) program for a further four years to continue supporting small businesses with advice and assistance.

The Government will also introduce a loss carry back initiative in 2012-13 to provide tax relief to companies struggling due to the high dollar. The loss carry-back will allow businesses to ‘carry back’ their losses, to offset past profits and get a refund of tax previously paid on that profit.

The new loss carry-back is estimated to benefit around 110,000 companies in its first four years.

Funds for Science and Research
Funding for science and research in universities will be increased by $126 million in 2012-13.

More University Places
An extra $23.4 million over the next four years to assist students from disadvantaged backgrounds or needing additional preparation to make the transition to university.

The Budget will increase the amount of loading paid to universities for enabling courses. By 2014, this funding will have increased the value of the loading by 50 per cent to $3068 for each full-time enabling place. These courses are provided free to students who need additional help preparing for a university course.

Reduced Defence Spending
The massive $5.5 billion cut in military spending impacts purchases of big ticket items and other hardware. But there is aslo a $1.2 billion cut in the capital works progaram which could have a flow-through effect on companies involved in defence-related projects.

No Company Tax Cut
The Government has reneged on its pledge to reduce Company Tax from 30 percent to 29 percent. The Australian Industry Group says this erodes industry's incentives to invest and innovate and that businesses in manufacturing will be hit hard.

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