Federal Budget 2024-25: the wins and shortcomings

In line with the government’s emphasis on bolstering regulatory capabilities, a substantial allocation of $206.4 million over four years has been provided to enhance the data capability and cybersecurity of key regulatory bodies such as the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC).

The funding announced in Treasurer Jim Chalmers’ third federal budget, was one of several aimed at delivering on Australia’s regulatory reform agenda.

Megan Motto, CEO of Governance Institute of Australia, welcomed the funding but stressed that additional efforts are necessary.

“Modern regulatory architecture is the backbone of a low-cost, efficient, and highly productive economy,” she said.

“While there have been a number of announcements to foster efficiency and innovation, this budget falls short of fully addressing the needs of the business landscape in reducing red tape and improving productivity.”

One such area is the recently proposed changes to the SOCI Act and cybersecurity legislation that have increased business costs. Greater assistance for organisations facing the rising costs of improving cybersecurity measures would be beneficial. You can view our submission to the Department of Home Affairs in response to the proposed reforms here.

This year’s budget includes $160 million allocated to combat terrorism and money laundering financing, specifically for the Australian Transaction Reports and Analysis Centre (AUSTRAC). This funding aims to enhance regulatory, intelligence, and data capabilities, providing essential guidance to newly regulated entities.

While the focus on combating financial crimes has been well-received, funding around competition reforms falls short of expectations. Treasury’s plan to develop a Regulatory Initiatives Grid for the financial sector is a positive step towards providing greater transparency regarding regulatory reforms and planned regulator initiatives. However, more announcements on competition reforms would have been welcomed.

Governance Institute is pleased to see a commitment of $10 million over four years to establish the Independent Parliamentary Standards Commission (IPSC) to make Commonwealth parliamentary workplaces safer and more respectful. This is an area of importance we have been advocating for some time.

The Budget also includes initiatives to support the transition to a low-emissions economy. Establishing the Net Zero Economy Authority and continuing funding for the Australian Renewable Energy Agency are key measures. Additionally, a $20 billion investment over ten years aims to accelerate the “Future Made in Australia” initiative, aimed at positioning Australia as a global energy superpower. However, further investments are needed to support financial disclosures of climate-related impacts and the implementation of the Taskforce on Nature-related Financial Disclosures (TNFD). To help you on the path towards net zero, take a look at our special Guide for boards and management.

In recognition of the importance of adapting regulatory frameworks to technological advancements, $7.5 million over four years will be allocated to modernise regulatory frameworks for financial services. This initiative aims to improve competition and consumer protections, particularly for services enabled by new technologies. Despite progress in this area, challenges persist, notably with outdated business registers. This includes better corporate law reforms, modern regulations, and the elimination of costly, complex, and unnecessary regulations. These reforms are essential for driving down living costs, improving living standards, and boosting productivity. You can find more details about our policy position on modernising business registers here.

The budget also reflects a forward-looking approach to technology governance, with a $39.9 million allocation to the “Safe and Responsible AI” program. This initiative aims to maximise the benefits of artificial intelligence while mitigating associated risks. Investment into this area is welcomed with our 2023 Ethics Index finding the increasing use of AI is in the top three ethical challenges. For our Good Governance Guide on Generative AI, head to our resources page.

An additional $25.3 million has been allocated to improve payment times for small businesses, building on previous commitments. The Government is also providing $290 million to extend the $20,000 instant asset write-off for 12 months, and $23.3 million to increase e-Invoicing adoption. These measures are intended to strengthen the payment times framework and provide tangible investment opportunities for small businesses.

Reforms and continued investment are crucial to ensuring that Australia’s regulatory framework remains efficient, secure, and capable of meeting future challenges. To develop the skills you need to tackle these challenges head on, head to the Governance Academy for all of our short courses, certificates and postgraduate education offerings.