2018

BUDGET OVERVIEW

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Master Builders Pre-Budget submission

In Master Builders Pre-Budget Submission we called on the Government to:

Boost government investment in infrastructure to improve the productivity and liveability of our cities and regions;

retain the tax exempt status of the family home and keep negative gearing and CGT in place and income tax cuts which benefit middle income earners the most;

Provide adequate funding for the National Housing Infrastructure Facility (NHIF) and the Affordable Housing Bond Aggregator (AHBA);

A more strategic focus on housing affordability, including greater support for community housing;

Continue the business simplification agenda to cut red tape and extend the small business instant asset write-off;

provide and enhanced role for small business in large Government procurement projects;

provide greater support for vocational skills development and apprenticeship programs;

ensure that the agencies tasked with monitoring safety on worksite, building quality through regulatory standards and industrial action are funded adequately; and

Support for seniors to age and people with a disability to live in their home will mean we will need make homes more accessible. Master Builders is supporting construction of accessible homes through its membership of Livable Housing Australia

There is much in the 2018 Federal Budget which addresses these key recommendations.

Notably, new infrastructure spending, and measures to ease the cost of living through

measures to reduce housing costs are features of this year’s Budget.

Overview

The Budget seeks to support the building and construction industry through a greater focus

on critical infrastructure, particularly to support greater city development through transport

infrastructure and City Deals, additional funding for existing housing programs announced as

part of the 2017-18 Budget, greater support for small businesses, more support for training

and education programs, and ensuring that the construction industry does not suffer under

unlawful industrial action with extra funding for the ROC and ABCC.

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Many of the measures announced tonight are consistent with Master Builders' positions and

our advocacy for industry specific policy settings that deliver tangible outcomes for members.

A summary of major initiatives relevant to Master Builders priority areas of reform; small

business, housing, work place relations and jobs and skills, is below, with greater detail

following thereafter. Further analysis will be released over the coming days.

Infrastructure

Of the $75 billion infrastructure funding and financing announced in the 2017-18 budget, $25 billion of this is expected to be committed for particular infrastructure projects.

Funding for infrastructure projects has been announced for states and territories, which is explained in more detail in the table below. These projects focus on road and rail.

The Budget includes continued funding for national partnership payments, which are essentially federal grants to the states/territories, the Government’s focus going forward is on projects in which they can have an equity stake.

Funding for critical infrastructure projects is also being tied in with City Deals to improve the productivity of regional cities.

City Deals announced so far include for Launceston, Townsville, Western Sydney, Geelong and Hobart, with more likely to be signed off over the next 12 months.

Housing

The National Housing Finance and Investment Corporation (NHFIC), which comprises of the $1 billion National Housing Infrastructure Facility and the Affordable Housing Bond Aggregator, is the centrepiece of the Governments housing affordability program and is on track to commence on 1 July 2018.

The new National Housing and Homelessness Agreement will commence on 1 July 2018. This agreement will provide $7 billion in housing funding and an additional $620 million for homelessness services over the next 5 years. Adding to an existing commitment announced last year of $375 for frontline homelessness services.

The Western Sydney City Deal also includes $15 million to support improvements in planning and zoning.

Small Business

The 2018-19 Budget focusses on reducing the tax burden on small business by:

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A reduction in the personal income tax rate for middle and low income earners, which will reduce the tax burden on unincorporated entities.

Extending the instant write off for equipment purchases of up to $20,000 for 12 months to 30 June 2019 for businesses with a turnover of less than $10 million.

Increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent. This rate will increase to 16 per cent by 2026-27.

Extend the company tax cuts to 27.5 per cent to business with turnover of less than $50 million from 1 July 2018. To reduce the company tax rate for all businesses under the Ten Year Enterprise Tax Plan.

Jobs and Skills

The Government will provide an additional $250 million in 2017-18 to fund a range of projects under the Skilling Australians Fund (the Fund) which provides support for apprenticeships and traineeships. The projects will support growth in trade and non-trade apprenticeships and traineeships in target areas.

State and Territory governments will be offered a new agreement which is estimated to provide $1.2 billion over the four years to 30 June 2022. This is based on current SAF levy revenue estimates plus total additional funding of $50 million per year over the four years.

Workplace Relations

The Government will provide an additional $8.1 million over four years from 2018-19 (including $1.0 million in capital funding in 2018-19) to the Registered Organisations Commission (the Commission).

The Government will provide additional funding of $1.4 million over five years from 2017-18 to the Office of the Commonwealth Ombudsman for oversight of the Australian Federal Police (AFP) and the Australian Building and Construction Commission (ABCC).

The Government will provide total agency resourcing for the ABCC is $75.04 million in 2017-18 and $74.3 million in 2018-19.

Tax Reform

Stopping short of wholesale tax reform, the Budget has some relatively big changes in the tax

and transfer system, which are worth a mention. Key changes include:

Tighter restrictions on cash payments, deductibility for business who do not meet their PAYG obligations and additional funding for the ATO for enforcement.

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Top up WA’s share of GST by investing additional $188.9 million in WA’s hospital infrastructure.

Income tax cuts targeted at those earning $87,000 and less. Income tax cuts will start small, phased in over a decade and become more significant from 2022-23 onwards.

o tax cuts for high income earners by 2024

A scale-back of the R&D tax incentive to a cap of $2 or $4 million of refunds in each year, with a lifetime cap of $20 or $40 million, and R&D must be at least 1% of total annual expenditure.

Increase of low income tax offset - tax relief for 2018-19 by increasing the low-income tax offset to taxpayers earning up to $87,000.

Abolished the 0.5 per cent increase in the Medical Levy

Petroleum Resource Rent Tax - Energy companies likely to pay more in tax through changes to the Petroleum Resources Rent Tax. Changes to ‘uplift concessions’ (determine tax deductions associated with exploration and construction).

The Government, under its 10 Year Enterprise Tax Plan remains committed to delivering company tax cuts for all businesses.

Fiscal Strategy – Debts and Deficits

The Budget surplus will come one year earlier than forecast in the previous 2017-18 Budget.

The Budget is then forecast to return to balance in 2019-20 of 2.2 billion, before increasing to

a surplus in 2020–21 of $11 billion or 0.5 per cent of GDP.

In 2021–22, the underlying cash surplus is projected to be $16.6 billion. The average pace of

fiscal consolidation amounts to 0.4 per cent of GDP over the forward estimates.

A net operating deficit of $2.4 billion or 0.1 per cent of GDP is forecast in 2018–19. The net

operating balance is forecast to improve to a surplus of $8.6 billion or 0.4 per cent of GDP in

2019–20 and is projected to be $27.4 billion or 1.3 per cent of GDP in the final year of the

forward estimates.

This is a significant improvement in the projected underlying cash balance since the 2017-18

MYEFO, equal to an improvement of more than $15 billion in the Government’s bottom line.

Table 1: Budget Aggregates

Estimates Projections

2018-19 2019-20 2020-21 2021-22

MYEFO Budget MYEFO Budget MYEFO Budget Budget

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Underlying cash balance ($b)

-21.4 -14.5 -2.6 2.2 7.4 11 27.4

% of GDP -1.1 -0.8 -0.1 0.1 0.4 -0.5 1.3

Payments as a proportion of GDP are expected to fall to 24.7 per cent over the forward

estimates, lower than at the 2017–18 Mid-Year Economic and Fiscal Outlook (MYEFO), and

lower than the 30-year average of 24.8 per cent of GDP.

Receipts as a proportion of GDP are expected to increase over the forward estimates, with

tax receipts not increasing above the Government’s cap of 23.9 per cent of GDP.

As a result of the improved budget position, net debt is expected to peak at 18.6 per cent of

GDP in 2017–18. Net debt is then projected to fall in each year of the forward estimates and

medium term, reaching 3.8 per cent of GDP by 2028–29.

As a proportion of GDP, payments are forecast to equal 25.4 per cent in 2018–19, falling to a

projected 24.7 per cent at the end of the forward estimates. Tax receipts as a share of GDP

are expected to be 23.1 per cent in 2018–19 and reach levels just shy of the 23.9 per cent cap

by 2021–22.

Over the medium term, tax receipts are expected to remain below the Government’s tax cap

of 23.9 per cent of GDP as a result of policy decisions to lower the tax burden on Australians,

until 2026–27 after which the cap takes effect. Net debt is expected to peak at 18.6 per cent

of GDP in 2017–18 and is projected to continue to decline to 3.8 per cent of GDP in the final

year of the medium term.

Compared with the 2017–18 MYEFO, the 2018–19 Budget forecasts for tax receipts have been

revised up by $12 billion over the four years to 2021–22, driven by upward revisions to

parameter and other variations, partly offset by policy decisions to lower the tax burden on

Australians including the Government’s Personal Income Tax Plan and the policy of retaining

the Medicare levy rate at 2 per cent. Policy decisions are expected to decrease tax receipts by

$13.9 billion over the four years to 2021–22.

Excluding policy decisions, tax receipts have been revised up by $25.9 billion over the four

years to 2021–22, with the strengthening Australian economy.

Budget Economic Outlook

Momentum in the Australian economy strengthened in the second half of 2017.

The transition from the investment phase of the mining boom towards broader-based growth

is set to be completed by the end of the forecast period. Growth is forecast to pick up to a

pace sufficient to lower the unemployment rate over the next few years.

The Australian economy is being supported by a positive global outlook. Global growth

exceeded expectations in 2017, rising to its fastest pace in six years. There has been

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broad-based strength across both advanced and emerging economies, indicating that the

global cycle is better synchronised than it has been for some time. This momentum is

expected to carry into the near term before slowing in some regions as major advanced

economies start to push up against capacity constraints.

Domestically, conditions remain favourable with consumer and business surveys at above-

average levels. Solid contributions from consumption and non-mining business investment

should underpin a pick-up in growth, as the drag from the unwinding of the mining investment

boom recedes. Mining exports are also forecast to grow solidly. Real GDP is forecast to grow

by a solid 2¾ per cent in 2017–18 and is forecast to accelerate further to 3 per cent growth in

2018–19 and 2019–20.

Capital expenditure in the private sector is also benefiting from a strong pipeline of work in

the public sector. A robust outlook for public final demand partly reflects the outlook for

strong infrastructure investment by both the States and Territories and the Commonwealth,

including significant investment in transport projects.

This pick up largely reflects and upturn in non-dwelling construction as well as the investment

in machinery and equipment. Supported by an improvement in non-residential building

approvals which has generated a solid pipeline of work yet to be done and an uptick in activity

associated with the construction of new buildings.

Particular strength has been evident in hotels and aged care facilities, and approvals indicate

a reasonable pipeline of work – especially in offices in Victoria and NSW

Table 2: Major economic parameters

Outcomes Forecasts Projections

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Real GDP 2.1 2.75 3 3 3 3 Employment 1.9 2.75 1.5 1.5 1.25 1.25 Unemployment rate

5.6 5.5 5.25 5.25 5.25 5

Consumer price index

1.9 2 2.25 2.5 2.5 2.5

Wage price index

1.9 2.25 2.75 3.25 3.5 3.5

Nominal GDP 5.9 4.25 3.75 4.75 4.5 4.5

Housing

The pace of dwelling investment has softened, reaching a peak of just under 6 per cent of

GDP in 2016-17. Dwelling investment is expected to moderate in 2017-18 by 3 per cent.

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However, strength in recent approvals are likely to keep dwelling investment historic highs.

Dwelling investment is forecast to rise in the Budget estimates by 1.5 per cent in 2018-19.

Elsewhere the rate of decline in dwelling investment in the mining states has slowed and

there are tentative signs of a pick-up, especially in WA.

The National Housing Finance and Investment Corporation (NHFIC), which comprises of the

$1 billion National Housing Infrastructure Facility and the Affordable Housing Bond

Aggregator, is the centrepiece of the Governments housing affordability program and is on

track to commence on 1 July 2018.

Under the City Deals programme, the Government will provide $125.0 million over five years

from 2017-18 to support infrastructure projects and liveability initiatives under the Western

Sydney City Deal, including:

up to $50.0 million towards the development of a business case for Western Sydney Rail, including an investigation of integrated transport and delivery options for a full North South Rail Link from Schofields to Macarthur, to be funded on a 50:50 basis with the NSW Government;

$60.0 million to improve community infrastructure in Western Sydney; and

$15.0 million to accelerate planning and zoning reforms to support housing supply in Western Sydney.

The new National Housing and Homelessness Agreement will commence on 1 July 2018. This agreement will provide $7 billion in housing funding and an additional $620 million for homelessness services over the next 5 years. Adding to an existing commitment announced last year of $375 for frontline homelessness services.

Other measures include:

The Government will provide $550.0 million over five years from 2018-19 (including $110.0 million in 2022-23) for a new five-year bilateral agreement with the Northern Territory Government on Remote Indigenous Housing.

The Government will provide $5.5 million over three years from 2018-19 to continue funding provided to the National Housing Research Program of the Australian Housing and Urban Research Institute. The program provides an evidence base to support the development of future housing, urban development and homelessness policies.

$4.8 million over four years from 2018-19 to the Australian Bureau of Statistics to construct better estimates of the stock of affordable housing and to improve existing survey-based planning and zoning data and dwelling construction cost collections.

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Infrastructure

The Government is committing $24.5 billion from 2018-19 to 2022-23, around a third of the

$75 billion transport infrastructure package to be delivered over the next decade. There is a

greater focus on establishing new mechanisms for financing infrastructure through

concessional loans and equity in major infrastructure projects.

The Budget includes continued funding for national partnership payments, which are

essentially federal grants to the states/territories, the Government’s focus going forward is

on projects in which they can have an equity stake.

Greater investment into productivity enhancing infrastructure is a centre piece of the

Government’s economic growth strategy. Funding for critical infrastructure projects is also

being tied in with City Deals to improve the productivity of regional cities.

City Deals announced so far include for Launceston, Townsville, Western Sydney, Geelong and

Hobart, with more likely to be signed off over the next 12 months.

City Deals with funding in the Budget include:

Western Sydney City Deal - $125.0 million over five years from 2017-18 to support infrastructure projects and liveability initiatives (more detail is found above under the section for housing).

Launceston City Deal – Tamar River: $47.5 million over five years from 2019-20 towards 12 projects to reduce pollution and improve the health of the Tamar River in Launceston, Tasmania.

The Cities Deals form a central part of the Infrastructure, Regional Development and Cities

Portfolio, which also includes$518.9 million from uncommitted funding towards:

Building Better Regions Fund — round three;

Stronger Communities Programme — round four;

Remote Airstrip Upgrade Programme — extension;

Western Sydney City Deal and a Western Sydney Airport Visitor and Information Centre;

Launceston City Deal — Tamar River;

Regional Australia Institute;

Myalup-Wellington project;

Indian Ocean Territories — essential infrastructure and air services;

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Management of Drones;

Aviation, Air Cargo and International Mail Security Package; and

other policy priorities.

The largest infrastructure package is for Victoria, led by a $5 billion commitment to the

Tullamarine Airport rail line, as well as $1.75 billion for the North East Rail link, Monash Rail

line and a congestion busting package for Melbourne.

NSW has won $400 million for the Port Botany Rail Line duplication and $50 million to support

a business case into a rail line to the new Western Sydney Airport. A significant package of

existing projects have also been extended funding through the Budget forward estimates.

Federal funding for Metronet in Perth has been raised to around $2 billion, while an additional

$942 million is allocated to reduce congestion in Perth.

Queensland will benefit from $1 billion for the M1 Pacific Motorway and an additional $1

billion for rail and road projects, including the Bruce Highway safety package.

South Australia has received around $1.5 billion extra, while the Northern Australia package

of $1.5 billion will benefit northern WA and the NT. Tasmania will receive $576 million which

forms the centrepiece of around $1 billion worth of Commonwealth funded uprades.

The ACT is to receive $200 million for the Barton Highway and $200 million for the Monaro

Highway.

Additional Project Highlights by State & Territory

New South Wales

The Government will provide $1.5 billion for priority regional and urban infrastructure in New

South Wales, including:

Port Botany Rail Line duplication funding increased to $400 million, from $105 million announced in the 2017 Budget.

$50 million for Western Sydney Airport business case.

$971 million for the Pacific Highway Coffs Harbour Bypass, adding to the $5.6 billion included in the 2017-18 Budget for the Pacific Highway duplication.

$155 million for the Nowra Bridge

The list above adds to an extensive list of projects already underway with Federal funding across the State, led by:

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$5.3 billion for Western Sydney Airport. Works will commence by late 2018 and airport operations will begin by 2026.

$2.9 billion for the Western Sydney Infrastructure Plan, with $725 million to be provided in 2017-18.

$1.5 billion of funding and a $2.0 billion concessional loan for the WestConnex project in Sydney, $720 million of the loan to be made available in 2017-18.

Victoria

The Government will provide $7.8 billion for priority regional and urban infrastructure in

Victoria, including:

$5 billion for the Airport Rail Link

$1.75 billion for the North East Link

$475 million for the Monash Rail

$225 million to help build the Frankston to Baxter Line

$140 million to tackle road congestion in Melbourne

$50 million Geelong rail

$132 million for the Princes Highway East

The list above adds to an extensive list of projects already underway with Federal funding

across the State, led by:

$500 million M80 Ring Road

$500 million for Stage 2 of the Monash Freeway upgrade

Queensland

New projects or funding includes:

$3.3 billion extra for the Bruce Highway upgrades, including:

o Pine River to Caloundra ($880.0 million); and

o Cooroy to Curra Section D ($800.0 million);

$1 billion for the M1 Pacific Motorway

$390 million for the Beerburrum to Nambour rail upgrade

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$300 million for the Brisbane Metro

$170 million for the Cunningham Highway

$15 million for a business case into the Brisbane to Toowoomba rail line

$1.5 billion to Roads of Strategic Importance for Northern Australia (WA, NT and Queensland).

Provision for this funding has already been included in the forward estimates and is in addition to funding of $1.5 billion provided for road infrastructure in northern Australia, including Queensland, under the measure titled Infrastructure Investment Programme — Roads of Strategic Importance.

Western Australia

$3.6 billion of new commitments for infrastructure in WA, with $5.4 billion committed to

infrastructure in WA over the Budget forward estimates, including:

GST top-up to fund an extra $189 million for hospitals

$1.05 billion extra for Perth METRONET

$1.67 billion for major road projects - $220 million for the Bindoon Bypass and $160 million for Outback Way

$104 million for water and dam projects

$500 million for the Morley to Ellenbrook rail line

$944 million to tackle congestion in Perth

$560 million for the Bunbury Out Ring Road

$10 million major project business case fund

South Australia

New projects or funding includes:

North South Corridor - future priorities: $1.12 billion, Regency Road: $177 million

$220 million for the Gawler Line Electrification

$160 million for the Joy Baluch Bridge duplication

Tasmania

New projects or funding includes:

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$461 million to replace the Bridgwater Bridge

$400 million for the Roads of Strategic Importance initiative

An extra $59.8 million for the Tasmanian Freight Rail Revitalisation

$730 million for Mersey hospital (combined government funding)

This is in addition to funding of $400.0 million provided for road infrastructure in Tasmania,

including the Bass Highway, under the measure titled Infrastructure Investment Programme

— Roads of Strategic Importance.

Northern Territory

New projects or funding includes:

$100 million for the Buntine Highway upgrade

$180 million to upgrade the Central Arnhem Roadway

This is in addition to funding of $1.5 billion provided for road infrastructure in Northern Australia, including the Northern Territory, under the measure titled Infrastructure Investment Programme — Roads of Strategic Importance.

Australian Capital Territory

New projects or funding includes:

$100 million for the Barton Highway

$100 million for the Monaro Highway

The Government is also providing $3.5 billion under the Roads of Strategic Important,

including $1.5 billion for the Northern Australia package for Western Australia, Northern

Territory and Queensland.

$1 billion for the Urban Congestion Fund and $250 million for a Major Project Business Case

Fund.

Greater details of projects by state and territory are available online at

www.investment.infrastructure.gov.au/funding/projects

Small Business

Australian small businesses are the engine room of our economy, making up 99 per cent of

all businesses. The Building and construction industry is home to around 360,000 small

businesses, more than any other sector.

The 2018-19 Budget focusses on reducing the tax burden on small business by:

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Increase of low income tax offset - tax relief for 2018-19 by increasing the low-income tax offset to taxpayers earning up to $87,000, as well as a reduction in the income tax rate which will reduce the tax burden on unincorporated entities.

Extending the instant write off for equipment purchases of up to $20,000 for 12 months to 30 June 2019 for businesses with a turnover of less than $10 million.

Increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent. This rate will increase to 16 per cent by 2026-27.

Extend the company tax cuts to 27.5 per cent to business with turnover of less that $50 million from 1 July 2018. To reduce company tax rate for all businesses under the Ten Year Enterprise Tax Plan.

The Government’s National Partnership on Regulatory Reform will reward States/Territories that reduce regulatory restrictions on competition, particularly those on small business.

The Government has deferred the start date of changes to the taxation of financial arrangements (TOFA) rules announced in the 2016-17 Budget. The Ten Year Enterprise Tax Plan — business simplification — taxation of financial arrangements — regulation reform measure will reduce the scope of the TOFA rules, decreasing compliance costs.

Jobs and Skills

The notable change in this area involves adjustments to the Skills Australians Fund (SAF). The

Government will:

Provide $250 million in 2017-18 to fund a range of projects under the Skilling Australians Fund (the Fund) which provides support for apprenticeships and traineeships. The projects will support growth in trade and non-trade apprenticeships and traineeships in target areas.

Implementation arrangements for the SAF will be tweaked. State and Territory governments will be offered a new agreement which is estimated to provide $1.2 billion over the four years to 30 June 2022. This is based on current SAF levy revenue estimates plus total additional funding of $50.0 million per year over the four years from 2018-19, on a per capita basis, to provide certainty to the States and Territories and support apprentices and trainees.

An additional $50 million is available in 2017-18, on a per capita basis, to those States and Territories that sign on to participate in the Fund on or before 7 June 2018.

Other programs include:

Under the Jobs and Skills for mature age Australians the Government will provide $189.7 million over five years from 2017-18

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$1.2 million in 2018-19 to upgrade Trades Recognition Australia’s existing IT systems to better support its ongoing role in managing technical and trade skills assessments sought by potential migrants to Australia, including charging arrangements.

$16.5 million over four years from 2018-19 to address ongoing resourcing needs of the Unique Student Identifier (USI) transcript service, including to allow VET students to grant transcript access to authorised employers and licensing bodies.

Industrial Relations/Work Health & Safety

There are no major announcements, save for a small injection of additional funding for the Registered

Organisations Commission, along with maintenance of funding to relevant agencies consistent with

existing resource levels. The Government will:

Provide an additional $8.1 million over four years from 2018-19 (including $1.0 million in capital funding in 2018-19) to the Registered Organisations Commission to boost its capacity to perform functions conferred on it by the Fair Work (Registered Organisations) Amendment Act 2016 and the Fair Work Amendment (Corrupting Benefits) Act 2017.

Maintain levels of resourcing for the ABCC, Fair Work Commission that are consistent with previous years.

Ensure ongoing funding for Asbestos Safety and Eradication Agency for resourcing of $8.6 million in 2017-18 and $7.9 million in 2018-19.

Continue and maintain funding for Safe Work Australia.

Other programs include:

Under the Jobs and Skills for mature age Australians the Government will provide $189.7 million over five years from 2017-18

$1.2 million in 2018-19 to upgrade Trades Recognition Australia’s existing IT systems to better support its ongoing role in managing technical and trade skills assessments sought by potential migrants to Australia, including charging arrangements.

$16.5 million over four years from 2018-19 to address ongoing resourcing needs of the Unique Student Identifier (USI) transcript service, including to allow VET students to grant transcript access to authorised employers and licensing bodies.

Tax

The Budget has some relatively big changes in the tax and transfer system, which are worth a

mention. Key changes include:

The Black Economy Package will tighten the ability to deal in cash and phoenixing of companies, including:

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o The Government will introduce a limit of $10,000 for cash payments made to businesses for goods and services from 1 July 2019.

o The Government will provide $318.5 million over four years to implement new strategies to combat the black economy. The ATO will implement a new and enhanced enforcement strategy that brings together new mobile strike teams and an increased audit presence

Top up WA’s share of GST by investing additional $188.9 million in WA’s hospital infrastructure.

Income tax cuts targeted at those earning $87,000 and less. Income tax cuts will start small, phased in over a decade and become more significant from 2022-23 onwards.

o tax cuts for high income earners by 2024

A scale-back of the R&D tax incentive to a cap of $2 or $4 million of refunds in each year, with a lifetime cap of $20 or $40 million, and R&D must be at least 1% of total annual expenditure.

Increase of low income tax offset - Tax relief for 2018-19 by increasing the low-income tax offset to taxpayers earning up to $87,000.

Petroleum Resource Rent Tax - Energy companies likely to pay more in tax through changes to the Petroleum Resources Rent Tax. Changes to ‘uplift concessions’ (determine tax deductions associated with exploration and construction) expected.

Superannuation

There are a range of new measures designed to improve the operation of the superannuation

system. These include:

The Australian Taxation Office (ATO) will be given the capacity to actively reunite Australians with their lost and inactive superannuation, boosting their balances at retirement. This will prevent people with multiple accounts from having their savings excessively eroded by fees, which will particularly benefit holders of inactive low balance accounts. These are typically young members, low income earners and seasonal workers.

Limiting fees on low balance accounts – A cap will be implemented on certain fees for accounts with balances less than $6,000 at 3 per cent

Banning exit fees – Designed to promote consolidation of superannuation accounts, by abolishing superannuation fund exit fees.

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Tailoring insurance arrangements - Insurance through superannuation may not be appropriate for all people — particularly younger members, those with low balances or those who are not making contributions. Holding fewer automatic insurance policies will allow Australians to grow their balances faster and protect low balances from being eroded entirely. Importantly, these members will still have the opportunity to obtain insurance cover if they choose to do so.

Competition

ACCC to receive an extra $3m to extend the work of the Commercial Construction Unit to ensure it can continue its work arising from related findings in the Heydon Royal Commission.

Master Builders National Office team will be examining the detail of the measures

summarised above over coming days and provide further analysis and commentary where

relevant.

This document is not legal advice. Whilst every care has been taken in preparing this document, no responsibility will be accepted for actions

taken in reliance upon information contained in this document.