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After a momentous weekend in federal politics where the Coalition was returned to power for a third term, all eyes are now turning to what policies are set to be delivered and what their impact will be on business and the economy.

Our experts put the policies of the newly returned Morrison Government under the microscope, analysing the likely outcome of the federal election for the areas of:


Coalition promises better transport infrastructure

In light of the continued population growth in Sydney and Melbourne and the associated congestion fatigue, construction and infrastructure were prevalent issues in the 2019 federal election. 

Following the approach taken in the NSW and Victorian elections, the two major parties highlighted major projects, particularly new roads and rail, as a drawcard for voters. As part of its strategy to capture ‘middle Australia’, the Coalition capitalised on promises in relation to infrastructure projects, particularly in Victoria.

The Coalition has stated it will invest $100 billion in transport infrastructure with a 10 year plan to reduce congestion and boost the economy. $1.6 billion will be allocated over the next four years to the Urban Congestion Fund which aims to alleviate congestion in urban areas. A further $6.7 billion was promised towards programs to upgrade regional road corridors and new road safety packages. The Roads of Strategic Importance program is set to receive $4.5 billion to upgrade regional road corridors and $42.2 billion is to be allocated for new road safety packages.

Highlights:

  • Western Sydney International Airport (NSW)
  • Western Sydney Rail (NSW)
  • Fast rail between Geelong and Melbourne (VIC)
  • Brisbane Metro, Gold Coast Light Rail and North Coast Rail (QLD)
  • Metronet in Perth (WA)
  • Canberra Metro (ACT)
  • Inland Rail investment of $9.3 billion (Melbourne to Brisbane)
  • Commuter Car Park Fund to improve access to public transport (National). 

NSW

Western Sydney was an election promise hot spot with the Coalition promising projects totalling $7.1 billion including $3.6 billion for road and transport connections to the Badgerys Creek airport and $3.5 billion towards the North-South rail link. Commitments to a $1.6 billion extension of the M1 Pacific Motorway to Raymond Terrace, and $500 million towards the Princes Highway between Nowra and Batemans Bay were also made.

Victoria

The Coalition made a $4 billion pledge towards Melbourne’s East West Link, a project that aims to connect the Eastern Freeway to the City Link via a tunnel underneath Melbourne’s congested northern suburbs. This commitment was made despite the Victorian Premier Daniel Andrews dumping the project in 2014 as it was set to cost taxpayers more than $1.2 billion. Mr Andrews has cautioned that building the East West Link could delay the North East Link already under construction, with issues around labour and raw materials. The Coalition aims to leverage $3 billion from the private sector and bypass the Andrews government.

The Coalition government also committed $2 billion towards a fast rail project between Melbourne and Geelong. However, funding for this project is not expected to commence until 2021-22 with the majority of the funding to be delivered beyond 2023-24. The Andrews Government will need to match the funding for the project to go ahead.

Queensland

A major investment of $100 million has been promised by the Coalition government to improve infrastructure projects throughout Queensland, included highlights such as the Brisbane Metro, Gold Coast Light Rail and North Coast Rail.

The Coalition will not provide funding for the Queensland Government’s most important infrastructure project, the $5.4 billion Cross River Rail project in Brisbane, which the Queensland Government will therefore have to continue to fully-fund on its own.

Western Australia

The Coalition has committed a comparatively high $1.6 billion to new infrastructure projects in Western Australia, when compared with previous years. The commitment is to be directed towards new roads, the removal of level crossings, and the replacement of the Fremantle Traffic Bridge. Labor had pledged millions of dollars towards infrastructure including $240.5 million to extend the Armadale rail line, and over $1 billion upgrading and extending the Tonkin and Roe highways to improve road safety and ease congestion. Whether the Coalition government will consider any of the initiatives Labor put forward is yet to be determined.

Tasmania

The Coalition visited Tasmania twice in the final week of the campaign as part of targeting the marginal seats of Bass and Braddon. The Coalition promised more than $60 million to upgrade a road in Tasmania’s north

Authors: Partner Scott Alden, lawyer Andrew Morello & paralegal Kate O'Mara

Sources:


Establishment of the Australian Business Growth Fund

The Coalition government will establish a new public-private fund to provide small and family businesses greater access to funding. With an initial equity investment of $100 million, the Australian Business Growth Fund is hoped to eventually grow to $1 billion through partnerships with banks, super funds and other financial institutions. The Fund would support 30–50 businesses each year with annual turnovers between $2 million and $50 million, both through direct financial investment and also through non-financial support including:

  • provision of strategic advice
  • mentoring
  • talent management
  • network referrals for small business to access.

The Fund is modelled off similar schemes established in the UK and Canada and will complement the existing $2 billion Australian Business Securitisation Fund, which supports small businesses through debt financing. The Fund follows the release of the Affordable Capital for SME Growth report by the Australian Small Business and Family Enterprise Ombudsman, which identified a major funding gap for Australian SMEs to start or grow their business.

The Fund provides new opportunities for public-private partnership, with two large domestic and one international bank already expressing some interest, and represents new funding opportunities in the wake of the Financial Services Royal Commission.

Establishment of the Manufacturing Modernisation Fund

Further support for small and medium Australian businesses will come in the form of the new Manufacturing Modernisation Fund. The Government will inject $50 million over three years to establish the Fund, allocating:

  • $20 million for small scale grants ($50,000 to $100,000), with industry to invest $1 for every $1 from the Government to support technology and efficiency improvements
  • $30 million for large scale grants (up to $1 million) with industry to invest $3 for every $1 from the Government to support more transformative investments in technologies and processes.

The Government expects the Fund to stimulate at least $160 million worth of business investment in new technologies and processes to enable manufacturers to employ more Australians, and hopes to complement this growth with a reinvigoration of the "Australian Made” Export Campaign delivered by Australia Made Campaign Ltd and funded by $5 million from the Government over four years.

Authors: Senior associate Georgia Milne

 

The state of legislation post-election in the privacy and data protection space is a tale of legislation proceeding at vastly different speeds.

The encryption legislation passed in great haste late in 2018 has been the subject of ongoing and significant criticism and had been promised to be amended by Labor if it came into power.

It looks as if that may now be deferred, particularly if other legislation takes a higher priority such as that relating to taxes and improving housing affordability.

The Consumer Data Right legislation has by contrast moved incredibly slowly through the Parliament and is likely also to be deferred as there appears to be little appetite commercially to advance it. Since its referral in February on the second reading to the Senate Economics Legislation Committee, and their report in late March, it has not advanced further. In addition, while the ACCC has published draft rules for it to operate in the open banking space, public comment on those rules only closed this month.

To the extent that the re-elected Coalition government considers there is a need for “evolution” rather than “revolution” in its policies then it is unlikely that we will see any further changes in the space in the near future.

Author: General counsel Lyn Nicholson


With the re-election of the Coalition government, we can now expect to see their immigration election promises to be rolled out. 

In March, it was announced that the permanent migration cap would be cut to 160,000 from 190,000.

While limited changes to the temporary migration scheme have been announced, the reduction in permanent visa grants will have a serious impact on migrants planning for their future in Australia. In particular, we expect to see an emphasis on regional permanent visas to foster rural development.

Prime Minister Scott Morrison also confirmed the Coalition would freeze Australia's annual refugee intake level to 18,750 for the next three years. This announcement came in contrast to Labor policy seeking to increase humanitarian intake to 32,000 by 2025-26.

It is not yet clear if any changes will be made to citizenship requirements as the Government may seek to reintroduce the Australian Citizenship Legislation Amendment (Strengthening the Requirements for Australian Citizenship and Other Measures) Bill, which was removed from Senate notice paper in late 2017.

At the time, the Government sought to increase the English requirement to “competent” (a score of at least six in each band on the International English Language Testing System (IELTS) exam) and to increase the residency requirement to four years as a permanent resident, up from four years general residency including one year as a permanent resident. 

Authors: Registered migration agent Rebecca Macmillan & lawyer Kathryn Cramp


Reducing emissions

The Coalition has committed to reduce Australia’s emissions by 26-28 per cent on 2005 levels by 2030 in accordance with the Paris Agreement. The Coalition has also introduced a Climate Solutions Package which will cost $3.5 billion over 15 years. The package includes the Climate Solutions Fund, a $2 billion fund which will ensure farmers, businesses and Indigenous communities continue to have opportunities to undertake emissions reduction projects, such as improving energy efficiency or increasing native vegetation. This will build on the success of the Emissions Reduction Fund. $1.38 billion from the package will go towards the construction of the Snowy 2.0 project, which will lead to lower emissions economy and creation of reliable renewable energy.

Renewable and affordable energy

The Snowy 2.0 project will be the world’s second largest pumped hydro renewable power station which will add 2,000 megawatts of energy generation and provide 175 hours of storage for the National Electricity Market, which is enough to power 500,000 homes. Snowy 2.0 will enhance stability and security to the energy market and increase affordability and reliability. It is expected that the Snowy 2.0 project will also create opportunities for jobs, local businesses and improvements in local infrastructure.

The Coalition government is targeting a 25 per cent reduction in the wholesale electricity price by the end of 2021 with the Underwriting New Generation Investments program.

From 1 July 2019, the Coalition has also said it will abolish the loyalty tax and the misleading use of discounts to attract customers. Australian families and small businesses changing to default market offers will have lower electricity prices. The default market offer performs as a price safety net and will require energy retailers to present their plans with a common price benchmark.

Environment

The Coalition will implement the Australian Recycling Investment Plan, which is worth $167 million, to increase recycling rates, tackle plastic waste and halve food waste by 2030. There will also be an investment of over $22 million in a new Communities Environment Program which will provide each federal electorate with up to $150,000 for local communities to implement environmental projects.

The Government has also pledged $100 million to a new Environment Restoration Fund to assist major environmental projects which include cleaning and protecting Australia’s coasts, oceans and waterways, protecting threatened species and increasing recycling and reducing waste.

Transport infrastructure

The Coalition has committed to a 10 year Infrastructure Pipeline with a $100 billion investment in transport infrastructure. This includes a $4 billion Urban Congestion Fund which will be used to remove traffic congestion areas. The Fund also includes a $500 million Commuter Car Park Fund, to upgrade commuter car parks and encourage an increased use of public transport.

The Government’s plan also involves constructing fast rail between Geelong and Melbourne, which will allow travel at an average speed of 160km per hour, cutting travel time in half to just 32 minutes. Due to commence in 2021-22, the construction will also allow better connection  with regional communities.

Overall

Climate change failed to materialise as the big issue of the federal election.

Many of the Coalition’s pledges reflect the continuation of the present situation. Grant funding of relatively small amounts of money, given subject to conditions, targeted at community groups, and others, designed to provide tangible ‘on the ground’ outcomes through either the extension of existing or the establishment of new funding programs.

With the obvious exception of Snowy 2.0 pumped hydro initiative, there is very little in the Coalition’s packages that will move to increase the proportion of renewable energy. The policies say nothing about the phasing out of coal from the electricity sector. The Underwriting New Generation Investments program may even see the Government moving to underwrite the investment in new coal-fired power plants.

At this point the funding criteria around the new programs, particularly the Communities and Environment Program and Environment Restoration Fund, have not been established. We look forward to seeing in more detail how those programs will operate. 

Author: Special counsel Peter Holt


Renewable energy: Key policy initiatives

Climate change was one of the ‘hot topics’ of the election campaign, with a range of energy policies announced by the Coalition focusing on reliable power generation and reduced energy costs.

The Coalition’s policies are largely targeted towards specific conventional and renewable energy projects and tend away from the more market-based approach to renewable certificates formerly proposed by Labor.

It will be interesting to watch how the Coalition’s policies need to change in order to pass the Senate.

A summary of the Coalition’s key policies are:

  • reducing energy prices by:
    • creating a ‘default market offer’ for retail electricity customers and regulating certain retail practices
    • removing ‘Loyalty Taxes’ on retail energy contracts from 1 July 2019
    • providing $3.65 million for Energy Assistance Payments to social security payment recipients ($75 for singles and $125 for couples)
  • creating a $50 million Energy Efficient Communities Program to provide more than 2,500 grants to eligible businesses and community organisations
  • backing the Marinus Link, a second Tasmania - Victoria interconnector and Snowy 2.0
  • underwriting 12 new generation projects (six pumped hydro, five gas, one coal upgrade)
  • targeting a 25 per cent reduction in the national spot electricity price to less than $70/MWh by the end of 2021
  • aiding ‘reliable’ generation by requiring retailers to enter into contracts to guarantee a certain level of base generation during peak demand
  • continuing to support the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (AREA)
  • creation of a $2 billion climate solutions fund and committing to meet the current Paris emissions target.

Author: Senior associate Scott Schlink


The return of the Coalition means that some of the more substantive changes to superannuation settings proposed by Labor will not be implemented. 

These include Labor’s policies to: lower the high-income super contribution tax threshold from $250,000 to $200,000, lower the annual non-concessional contributions cap from $100,000 to $75,000, make widely-discussed changes to franking credits, and to give higher priority to increases to the superannuation guarantee.

We discuss some of the key superannuation changes flagged by the Coalition below. 

Increases to the superannuation guarantee

The compulsory super guarantee, currently at 9.5 per cent, is slated to start increasing by 0.5 per cent each year from July 2021 until it reaches 12 per cent by 1 July 2025. This is consistent with the freeze on increases until 1 July 2021 that was introduced by the Abbott Government in 2019. 

The Government has given no indication it intends to continue the freeze. The Government’s position can however be contrasted with Labor’s stated position, which was to increase the guarantee to 12 per cent ‘as soon as practicable’ (and to continue towards its original objective of 15 per cent).

Increase age for contributions to super without passing the work test

Australians aged 65 and 66 will be able to make voluntary superannuation contributions, both concessional and non-concessional, without meeting the work test. Under the current law, they can only make voluntary contributions if they meet the work test, which requires that they work a minimum of 40 hours over a 30 day period.

Increase age for the bring-forward rule

The bring-forward rule allows Australians aged under 65 to bring forward three years of non-concessional contributions totalling up to $300,000, into one income year. The Government will now give Australians an extra two years to make large contributions into super, by extending the scheme to anyone aged under 67 years.

Increase age for spousal contributions

Further, the age limit for making spousal super contributions has been increased from 69 to 74 years. Under the current law, Australians aged 70 and over cannot receive contributions made by another person on their behalf.

Response to Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and other changes

In advance of the election, the Federal Parliament had already started legislating responses to the Royal Commission’s recommendations, together with other significant changes, in the Member Outcomes and Protecting Your Super legislation (amongst others). 

As super fund trustees continue to work busily to address these changes, the enhanced level of regulatory oversight should continue to be viewed as the ‘new normal’ for all industry participants.

Authors: Special counsel Ravi Jayemanne & graduate Yini Chong 


The Coalition has committed to provide $1 billion to the ATO as a boost to the Tax Avoidance Taskforce. This taskforce will specifically target tax avoidance issues by multinationals, large corporates, and wealthy families. The funding, announced earlier this year in the federal budget, will be made over four years. It’s expected to realise an additional $4.6 billion in revenue.

Holding Redlich tax litigation partner Damien Bourke says that the Government, in recognition of the ATO raising a staggering $12.9b in assessments since 2016 – sees this as a fertile area in which to ‘invest’.

This is a massive injection of funding which will facilitate the ATO’s compliance program - increase audit activities and raise assessments. For these groups the prospect of an ATO audit is really now a question of ‘when’!

Author: Partner Damien Bourke


No plans for legislative reform - but anticipate heightened industrial tension as unions redirect resources to campaigns on the ground

The re-elected Coalition government didn’t take any significant reform proposals to the electorate. Therefore, we are unlikely to see any significant changes to industrial laws in the short to medium term.

The re-election of the Coalition means the construction industry watchdog, the ABCC, and the Federal Registered Organisations Commission will remain in operation.

It is also helpful to highlight the Coalition’s plans for industrial relations from the 2019 Federal Budget.

  • casual conversion rights: we expect the Government will reintroduce the Fair Work Amendment (Right to Request Casual Conversion) Bill 2019 to the Federal Parliament. If passed into law, this law will extend the right for certain casual workers to convert their employment status to permanent
  • labour hire licensing: the Government proposed to develop a national labour hire registration scheme for the four “high risk” industries of horticulture, meat processing, cleaning and security
  • enforcement: In the 2019 Budget, the Coalition committed more funds to create a “sham contracting” unit within the Fair Work Ombudsman. It also increased funding to allow the Fair Work Ombudsman to allocate more resources to underpayment investigations. This is in addition to the Coalition’s plan to legislate for jail sentences in extreme cases of wage underpayment.
  • PPL: The Coalition has promised, from 2020, to allow families to separate their entitlement of Government-funded paid parental leave into two periods of leave to increase opportunities for flexible work.

In the meantime, disappointed unions are unlikely to resile from their campaigns against what they consider to be the excessive use of labour hire and casual employment arrangements which undermine job security, collective rights and employment conditions for workers in manufacturing, transport, horticulture and logistics. Features of this campaign include:

  • bargaining for enterprise agreement provisions that restrict the use of casual and third party labour
  • supporting class action type litigation that seek ‘permanent-like’ entitlements, such as annual leave, for casuals (as were successfully claimed in Workpac v Skene)
  • active engagement with government agencies with responsibilities affecting labour hire, such as the newly established labour hire licensing authorities in Queensland and Victoria, safety regulators in all jurisdictions, and Commonwealth departments responsible for the temporary immigration of seasonal and skilled workers
  • pressure on superannuation funds and other investors, as well as large end-users such as the major supermarket chains, to endorse certain industrial standards for labour hire and casual workers in their supply chain.

Authors: Partner Michael Selinger, partner Charles Power & graduate Declan Johnston

Contacts

Construction & Infrastructure
Scott Alden, Partner
T:
+61 2 8083 0419
E:
scott.alden@holdingredlich.com

Corporate & Commericial
Darren Pereira, Partner
T: +61 2 8083 487
E: darren.pereira@holdingredlich.com

Data & Privacy
Lyn Nicholson, General Counsel
T: +61 2 8083 0463
E: lyn.nicholson@holdingredlich.com

Immigration
Rachel Drew, Partner
T: + 61 7 3135 0617
E: rachel.drew@holdingredlich.com

Rebecca Macmillian, Registered Migration Agent
T: +61 7 4230 0412
E: rebecca.macmillian@holdingredlich.com

Planning, Environment & Sustainability
Breellen Warry, Partner
T: +61 2 8083 0420
E: breellen.warry@holdingredlich.com

Peter Holt, Special Counsel
T: +61 2 8083 0421
E: peter.holt@holdingredlich.com

Renewable Energy
Stephen Natoli, Partner
T: +61 3 9321 9796
E: stephen.natoli@holdingredlich.com

Scott Schlink, Senior Associate
T: +61 3 9321 9939
E: scott.schlink@holdingredlich.com

Superannuation, Funds Management & Financial Services
Paul Faure, Partner
T: +61 3 9321 9904
E: paul.faure@holdingredlich.com

Ravi Jayemanne, Special Counsel
T: +61 3 931 9712
E: ravi.jayemanne@holdingredlich.com

Taxation
Damien Bourke, Partner
T: +61 7 3135 0551
E: damien.bourke@holdingredlich.com

Workplace Relations & Safety
Michael Selinger, Partner
T: +61 8083 0430
E: michael.selinger@holdingredlich.com 

Charles Power, Partner
T: +61 3 9321 9942
E: charles.power@holdingredlich.com 

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources. 

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