BUDGET TO BOOST PRODUCTIVITY AND CUT REGULATORY COSTS BY $10 BILLION

CANBERRA, ACT, May 12 -- The Treasurer of Australia issued the following media release:

The Albanese Labor Government is delivering a comprehensive package to boost productivity and reduce regulatory costs in this year's Budget.

Boosting productivity is central to this Budget because it's the best way to lift wages and living standards for Australians.

Our comprehensive package to boost productivity and reduce regulatory costs will make it easier to build, easier to do business and easier to invest and innovate in this country.

Combined, Labor's reforms will reduce regulatory costs by $10.2billion each year, boost long‑run GDP by around $13billion a year and promote $400million more investment in R&D by young firms each year.

Our reforms make substantial progress on 13 of the 17 reform areas identified in the Productivity Commission's inquiries into Australia's productivity agenda, progressing the majority of near‑term recommendations for the Commonwealth.

Whether it's streamlining housing approvals, simplifying payroll tax administrative arrangements, slashing tariffs, unlocking investment in innovation or cutting compliance costs, our reforms are good for businesses, good for workers and great for our economy.

Productivity Package

Incentivising investment and innovation

* Permanently introducing two‑year loss carry back for companies up to $1billion in turnover from 1July 2026 to support resilience, investment and sensible risk taking by Australian firms.* Introducing loss refundability for start‑ups from 1July 2028, to help new businesses invest and grow in their first twoyears. Refundability will be capped at the amount of fringe benefits tax and withholding tax paid on employees' wages. This provides a tax refund for startups before they are profitable.* Expanding tax incentives for venture capital from 1July 2027, to encourage more investment in new and innovative firms. This unlocks investment for these firms that find it hard to access traditional finance, despite usually having high productivity and creating new jobs.* Better targeting the Research and Development Tax Incentive from 1July 2028 which will unlock $400million in additional research and development by young firms per year.* Making the $20,000 small business instant asset write‑off permanent, to support small businesses to invest and keep compliance costs low.

Reducing red tape

* Reducing regulatory burdens in the financial sector by $780million a year by progressing 14 legislative reforms, including by increasing the monetary thresholds for large proprietary companies, improving the efficiency of climate‑related financial disclosures, further modernising business communications by making electronic recordkeeping and communication with ASIC easier and increasing the cap on banks' covered bond issuance.* Reducing duplicative, inconsistent or opaque data requests through 13 actions by financial regulators, while delivering more than 50 commitments in the Better Regulation Roadmap, reducing annual costs by $181million per year.* Saving small businesses 376,000hours on their tax returns by making the $20,000 instant asset write‑off permanent and moving towards dynamic monthly tax instalments.* Working with the states and territories to harmonise payroll tax administrative arrangements.

Removing barriers to trade

* Abolishing another 497 nuisance tariffs, bringing the total tariffs removed to around 1,000 and saving businesses $157million per year in compliance costs. We are also consulting on abolishing another set of tariffs to further cut costs for Australian businesses, strengthen competitiveness and enhance productivity.* Reducing red tape for export and import businesses with faster access to markets through a $7.6million investment in expanding Australian Trusted Trader.* Streamlining biosecurity border processes to help get fertiliser to farmers faster.

Building a single national market

* Making it easier to run a business across states and territories by harmonising state retail tenancy frameworks.* Making more standards consistent across states and territories, with key agricultural and veterinary chemical products added alongside existing work on household electrical consumer products, waste and recycling, building and construction, and food standards.* Accelerating and expanding heavy vehicle reforms to reduce fuel costs, increase transport productivity and support the uptake of heavy zero emissions vehicles.

Making it easier to engage with government

* Providing a further $654million to expand the availability of Digital ID as a simple and secure way for Australians to verify their identity and reduce the sharing and storage of personal data by businesses, government and individuals.* Improving the Consumer Data Right to make the storage and sharing of personal information easier and safer.* Adopting a 'tell us once' approach so Australians spend less time providing the same information across different areas of government.* Making it easier for businesses to engage with regulators through further investments in ASIC's business registries, including linking Director IDs held by 3million directors to ASIC's Companies Register.

Accelerating approvals

* Investing more than $500million for environmental regulatory reforms that accelerate approvals by reducing duplication with states and territories and by modernising applications, including through the use of AI.* Making approvals more efficient for telecommunications infrastructure by modernising the Telecommunications Act1997 and the National Broadband Network Companies Act2011.* Delivering faster foreign investment approvals, through further streamlining and strengthening the foreign investment framework.* Giving potential investors in offshore resource projects certainty, sooner, by making consultation requirements clearer.* Strengthening the Investor Front Door to become the single entry point for projects seeking Commonwealth regulatory and investment facilitation. This is part of the Government's Future Made in Australia effort to attract and accelerate nationally significant investments, and working with states and territories to set target timeframes to accelerate approvals for pilot projects.

Simplifying building regulations

* Making all mandatory Australian standards free, including across construction, occupational health and safety, and product safety, saving small electrical, plumbing and construction firms up to $1,600 per year in access fees.* Delivering new agreements with states to remove regulatory barriers to modern methods of construction in housing and streamline commercial zoning and planning.

Building more homes

* Investing in housing‑enabling infrastructure like roads, water, power and sewerage to support up to 65,000 homes over 10years.* Working with states and territories to fast track housing approvals, make more land available and ready to build more homes, and deliver a simpler and genuinely National Construction Code. These reforms have the potential to support tens of thousands of additional homes.

Modernising energy markets

* Implementing a 20% Domestic Gas Reservation from 1July 2027 to ensure Australian gas users have access to sufficient gas at reasonable prices.* Pursuing significant reforms to the National Electricity Market in collaboration with states and territories to unlock more investment in energy projects, including $71.8million in this budget for a Consumer Energy Resources National Technical Regulator.

Enhancing our skills recognition system

* Making it quicker to recognise the skills of migrant trades workers and to accelerate occupational licensing- cutting the time taken to enter the workforce by up to sixmonths.* Reforming the permanent migration points test for skilled visas to select better educated, higher‑skilled and younger migrants.* Providing a pathway to quicker degrees for university students with TAFE qualifications in the same area through a National Credit Recognition Framework.

Unlocking the AI and data opportunity

* Building local artificial intelligence research and industry capability through up to $70million available through AI Accelerator CRC program rounds.* Advancing use of AI in government to improve service delivery and boost productivity, with AI use cases in production across public sector agencies, including in accelerating environmental approvals and scoping options to simplify the construction code.* This builds on the Government's recent announcement of Expectations of data centres and AI infrastructure developers, which are now shaping data centre development - including through commitments made through MOU's with Anthropic and Microsoft.

Investing in science and innovation

* Establishing a new National Resilience and Science Council to provide strategic oversight of the Government's innovation investment to better align it with Australia's economic objectives, helping to guide the Government's more‑than $39.1billion investment in R&D over the forward estimates.* Investing $1.5billion to strengthen our research and innovation institutions, including CSIRO, the Australian Centre for Disease Preparedness, the National Measurement Institute and the Square Kilometre Array.* Provisioning for increased investment in disbursements for medical research from the Medical Research Future Fund.* Supporting financial innovation by facilitating testing of use cases for tokenisation, undertaking market analysis of a tokenised government bond and developing a new strategic plan for the payments system.* Progressing work to simplify regulatory requirements so that universities can better focus on areas of world‑leading research.* Helping teachers access high quality evidence‑based classroom materials and technologies across the country to support students' learning.

Strengthening the superannuation performance test

* Further consultation on reform options that remove unnecessary barriers to investment while supporting strong member outcomes, cover a broader range of products and strengthen member protections.

Better coordinating Government investment

* Strengthening the role of the Investor Front Door as the single point of entry for Commonwealth project facilitation and the chair of the Investor Council, where it will support the Government's specialist investment vehicles like the National Reconstruction Fund and the Clean Energy Finance Corporation to share information, identify barriers to investment and better coordinate investments.* Deploying the National Reconstruction Fund and Export Finance Australia to boost supply chain resilience amidst global fuel market disruptions, and amending the Clean Energy Finance Corporation's Investment Mandate to simplify administrative arrangements.

Driving ongoing regulatory reform

* Delivering regular regulatory reform bills through the Parliament that will drive significant simplification and modernisation of laws.* Tasking deep dives into priority areas for regulatory reform, with the Productivity Commission tasked to complete an inquiry into business dynamism. This inquiry will look into the barriers firms face- particularly young firms that create 6 out of every 10 new jobs- and whether Australia's corporate, anti‑phoenixing and personal insolvency frameworks are fit for purpose and working effectively. This is on top of the regulatory reform deep dives already underway following the Economic Reform Roundtable.

This comprehensive package is on top of Labor's already ambitious productivity agenda including our landmark merger reforms, payment reforms, ban on non‑compete clauses, the National Housing Accord, Capacity Investment Scheme and our investments in skills and training and more.

This Budget is all about resilience and reform and our productivity package is central to this agenda.

The terms of reference for the business dynamism inquiry are available on the Productivity Commission website.

Disclaimer: Curated by HT Syndication.