Your governance and risk guide to the 2024 Federal Budget

Funding for cyber security, climate change energy transition and better regulation announced in tonight’s Federal budget has been welcomed by Governance Institute of Australia as a significant acknowledgement of the importance of much needed reforms. 

The Federal Government has also announced funding for the ACCC, ASIC and APRA to improve competition and provide better oversight of organisations as Australians continue to struggle with high inflation and cost of living pressures.  

Governance Institute CEO Megan Motto said the budget addressed a number of key issues relevant to the concerns of its membership.  

“Our members strongly support recognising the critical role of cyber security and the disruption to business that serious breaches can cause,” Ms Motto said. 

“Investing in cyber security, the digital economy, and AI is crucial for safeguarding Australia’s digital infrastructure and promoting innovation. Financial support for these areas will enhance our resilience and competitiveness in the digital age.” 

Other related announcements include: 

• $7.5 million over four years from 2024–25 to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology;  

• An additional $76.2 million over five years from 2023–24 to support Australia’s continued engagement in international climate change and energy transition issues;  

• $288.1 million over four years from to support the initial delivery of the Digital ID system and support more Australians to realise economic and privacy benefits. 

“Productivity reform is crucial for reducing business costs and inflationary pressures. Streamlining regulations and adopting modern regulatory architectures will enhance efficiency and stimulate investment, benefiting both businesses and consumers,” Ms Motto said. 

“We welcome the development of a Regulatory Initiatives Grid for the financial sector, to provide greater transparency of regulatory reforms and promote better collaboration and engagement with industry, reducing the regulatory burden.” 

While the Government has committed some funding towards modernising regulatory architecture, Governance Institute had called for a $1.7 billion dollar investment in it its pre-budget submission. 

“Australia still has out-dated Business Registers that are expensive, clunky and increasingly risky to deal with. We need reforms to ensure that business entities can safely, securely and confidently engage with Government to register business activities.” 

Ms Motto said while the slim surplus is positive, it could perhaps be put to best use by implementing a broader structural reform agenda, 

“Comprehensive corporate law reform is long overdue,” Ms Motto said. 

“We would like to see an independent corporate law reform body which we believe is essential to drive meaningful and sustainable change.” 

“It would provide the necessary expertise to recommend and implement reforms that streamline regulations and enhance the efficiency of our corporate sector.” 

Budget 2024 

Your governance and risk guide to the federal budget 

In this special report, we examine tonight’s federal budget, highlighting what you need to know about the major governance and risk management announcements.   

We drill down on the Treasurer’s announcements on the economy, cost-of-living relief, and investments in critical minerals and renewable energy. 

Budget 2024: overview 

Federal Treasurer Jim Chalmers delivered his third budget and second budget surplus tonight with five main priority areas: 

• Help with the cost of living. 

• Building more homes for Australians. 

• Investing in its Future Made in Australia policy. 

• Strengthening Medicare and the care economy. 

• Responsible economic management.  

Help with the cost-of living 

The government highlighted Stage 3 tax cuts which means every taxpayer will receive more in their take home pay (not including any potential loss as a result of the increase in the superannuation guarantee). 

There is also $3.5 billion in energy bill relief with all households receiving a $300 rebate from July 1. Small businesses will get slightly more. The government will also provide up to $3 billion for cheaper medicines and freeze the maximum cost of PBS prescriptions.  

As announced previously, the government will cap indexation of student loans to the lower of the consumer price index or the wage price index, and backdate it to last year, saving the average person with HELP debt around $1200. 

The government will also provide $1.9 billion to increase the maximum rates of Commonwealth Rent Assistance by 10 per cent.  

Building more homes for Australians 

Dr Chalmers has stuck to the government’s goal of building $1.2 million new homes over the next five years. There is an extra $6.2 billion in new money to clear local infrastructure bottlenecks, provide more housing for students and fund more social and affordable housing.  

There’s also $89 million for 20,000 additional fee free TAFE and VET places to train more construction workers. 

Investing in a Future Made in Australia 

The government says its $22.7 billion Future Made in Australia package will attract investment in key industries, help make Australia a renewable energy superpower, strengthen defence capabilities and economic security, support small business to take advantage of the transforming economy, and expand and reform tertiary education for a more skilled workforce. 

Dr Chalmers said the government will make it easier for investors to accelerate and coordinate transformational projects. The government will also establish a National Interest Account, and strengthen and streamline approvals across environmental, planning, cultural heritage, and foreign investment. 

There’s also a $1.7 billion Future Made in Australia Innovation Fund, to develop new industries like green metals and low carbon fuels, $520 million to deepen net zero trade and engagement with our region and $566 million to map Australia geologically. As already announced, the National Defence Strategy will cost $50.3 billion over the next decade.  

For small businesses, the government has extended the $20,000 instant asset write-off until 30 June next year. It will also provide $290 million in cash flow support for up to 4 million small businesses. There is also money to help farmers and rural communities reduce emissions and better prepare for climate change.  

The government has also set a target of having 80 per cent of workers achieving a tertiary qualification by 2050, with investments in for university-ready courses and priority industries like clean energy, construction, and manufacturing.  

Strengthening Medicare and the care economy

The federal government has announced more money for Medicare Urgent Care Clinics, which the government hopes will take pressure off hospital emergency departments. There is also money for mental health, including a national digital mental health service. 

There’s money for aged care and the implementation of the Royal Commission recommendations and $531 million for 24,000 home care packages. 

The government will fund wage rises for aged care and childcare workers, including payment of superannuation for maternity leave, and there is a $925 million to establish the permanent Leaving Violence Program.  

Economic responsibility 

The federal government has forecast economic growth of 1.75 per cent this financial year, rising to 2 per cent in in the 2025 fiscal year. The unemployment rate is forecast to rise to 4.5 per cent next year. 

Dr Chalmers claims that the government’s cost of living policies will take 0.75 percentage points off inflation this year, and 0.5 percentage points next year.  Treasury expects the inflation rate to come into the Reserve Bank’s target range as early as the end of this year. 

The Treasurer said real wages are expected to grow this year for the first time in three years, while business investment will continue its expansion. Net migration is forecast to halve from its record levels for most of 2023. 

The bottom line this financial year is a surplus of $9.3 billion – the second in a row. In the following years the government expects large budget deficits. Gross debt is expected to peak at 35.2 per cent of GDP in 2026–27 before declining to 30.2 per cent by 2034–35. This year gross debt will be $904 billion. 

Low emissions economy 

The new ‘Future Made in Australia’ program includes $19.7 billion over ten years to accelerate investment in renewable hydrogen, green metals, and other clean energy technologies including in solar and battery supply.  

The spending includes $7 billion in new tax incentives for critical minerals and $8 billion to support the development of a green hydrogen industry – which will be delivered as a production incentive of 10 per cent of the processing and refining costs for minerals and a credit of $2 a tonne for clean hydrogen. 

Separately, the Future Drought Fund will allocate $519.1 million over eight years for initiatives to support farmers and communities to manage drought and adapt to climate change.  

In addition, $63.8 million will be provided over ten years to support emissions reductions in the agriculture and land sectors. 

Sustainable finance 

The Government has marked sustainable finance as a priority with a $17.3 million four-year funding that includes additional resourcing for the Australian Securities and Investments Commission to crack down on greenwashing, plus additional funding for APRA’s sustainable finance framework.  

The funding will also support the development of a regime governing the use of sustainability labels on investment products and the ongoing development of Australia’s sustainable finance taxonomy. 

Cybersecurity 

The Government will introduce mandatory industry codes for businesses to address scams on their platforms, initially targeting telecommunications, banks and digital platforms. ASIC, the ACCC and ACMA will administer the code. 

Artificial Intelligence 

Additional funding will support the development of policies and capability to support the safe adoption of artificial intelligence.  

This includes funding the National AI Centre and a review of AI regulations in health care, consumer, and copyright law. The Government also set out its intention to become an “exemplar in the use of AI”. 

Digital transformation 

The government’s Digital ID scheme will get a $288.1 million spending boost over four years, aimed at improving the operation of the myGovID system and ultimately reducing the amount of personal information held by businesses by piloting the use of government digital wallets and verifiable credentials. 

Productivity 

Some 457 nuisance tariffs will be abolished in a bid to improve productivity by streamlining the annual import of $8.5 billion worth of goods including toothbrushes, hand tools, fridges, dishwashers, and menstrual and sanitary products. 

Updating key business registers 

Cyber security concerns are driving the need for an additional $206.4 million spend over four years to help Australian Prudential Regulation Authority and the Australian Securities and Investments Commission continue the stabilisation of business registers and modernisation of systems.  

Competition reform 

The Government is progressing its competition reforms including replacing current merger controls with a new regime that will include keeping a database of mergers and acquisitions in Australia. It is also expanding the scope of its competition review to include looking at non-compete clauses.