How does the Federal Budget affect deep tech innovation, and how does this impact my business?

What this year's Federal Budget means for individuals, startups and deep tech innovation. 

To ensure our long-term economic prosperity, Australia must continue to develop and establish sovereign capabilities in future critical industries.

"This requires aligning the nation on a bold and visionary future through policy levers focussed on long-term, transformational opportunities while also galvanising short-term action to address our current circumstances", commented Cicada Innovations CEO Sally-Ann Williams.  

Sally also mentioned, "We are pleased to see the government take a systems - not silos - approach to this budget, directly linking investment in critical industries with initiatives to upskill our workforce in corresponding focus areas".

Read on to see how the 2024-2025 Federal Budget will affect deep tech innovation and how this might impact you and your business. 

For me and my team

The 2024-25 Federal Budget introduces pivotal financial changes aimed at alleviating individuals' cost of living burden. This includes: 

• Tax Cuts: The 2024-25 Budget introduces significant tax cuts for all 13.6 million Australian taxpayers, starting from 1 July 2024. From 1 July this year, the Government will:
  • Keep the tax-free threshold at 0 to $18,200.
  • Reduce the 19 per cent tax rate to 16 per cent from $18,201 to $45,000.
  • Reduce the 32.5 per cent to 30 per cent from $45,001 to $135,000.
  • The 37 per cent rate now comes in at $135,001 to $190,000, which increases the income threshold above which the 37 per cent tax rate applies from $120,000 to $135,000.
  • The 45 per cent rate now comes in at $190,001+, which increases the income threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.

• Parental Leave: $1.1 billion extra for superannuation payments on government-paid parental leave payments over the 5 years.
• Student Debt Relief: $3 billion cut in student debt across various loan programs, with protections for the value of the student loan system maintained.

For my small business

This year’s budget focused most investment incentives on specific industries rather than the wider small business sector, but here are the notable ones for small businesses:

• The $20,000 instant asset write-off for all small businesses with annual turnover below $10 million will be extended for another year, covering around 4 million small businesses and worth around $290 million.
• The Energy Bill Relief Fund is providing energy rebates to each of the approximately one million businesses on small customer electricity plans to help cover their electricity bills. This Budget will provide additional energy bill relief of $325 to eligible small businesses.

For deep tech and my sector

The headline policy for the budget is the Government’s $22.7 billion Future Made in Australia package, which aims to help facilitate the private sector investment required for Australia to be an indispensable part of the global economy. The National Reconstruction Fund is the start of Labour’s mission to rebuild Australia’s industrial capabilities. This new investment will hopefully further propel innovation technology by maximising the economic and industrial benefits by moving to net zero and securing Australia’s place in a changing global economic and strategic landscape.

Climate & Renewables

• $19 billion to accelerate investment in ‘Future Made in Australia’ priority industries: renewable hydrogen, green metals, low carbon liquid fuels, refining and processing of critical minerals and manufacturing of clean energy technologies.
• $566 million to support research into and development of Australia’s critical minerals and strategic materials industry.
• $218 million for workforce development of the clean energy and industry sectors, including:
  $91 million to address vocational education and training sector workforce shortages for energy trades, and $10 million in 2025–26 to establish a National Hydrogen Technology Skills Training Centre in partnership with the Victorian Government.

Space & defence innovation

• $5.7 billion over 4 years of additional spending on the Integrated investment program and National defence strategy – expanding capabilities of the armed services and building the critical defence industry infrastructure and workforce skills ahead of the adoption of new technologies.
• $183.8 million in defence industry grants to support Australian small and medium businesses. This will include the new Defence Industry Development Grant Program, which will reduce the administrative burden on small and medium businesses and provide greater opportunities for tailored financial support.
  
  

Health Innovation & Medical Research

• $1.4 billion over 13 years in new health and medical research funding through the Medical Research Future Fund (MRFF), including an additional $411.6 million for low survival cancers and reducing health inequities, as previously announced on 2nd May 2024. 
• $25.9 million over two years from 2024–25 to the Australian Nuclear Science and Technology Organisation to continue production of affordable nuclear medicines.
• The Government will provide $18.8 million over two years from 2024–25 to continue the development of the National One Stop Shop for Clinical Trials and Human Research (National One Stop Shop) and support current systems. The National One Stop Shop will streamline work to manage clinical trials and human research, including the management of cross-jurisdictional ethics approvals. Funding includes:
  • $17.2 million in 2024–25 to continue the development of the National One Stop Shop for Clinical Trials and Human Research.
  • $1.6 million over two years from 2024–25 to continue support for the Australian New Zealand Clinical Trials Registry until this data function can be included in the National One Stop Shop.

Agriculture innovation

• The government is allocating $519.1 million to the Future Drought Fund over the next eight years from 2024/25. This includes $132 million to continue the eight drought resilience adoption and innovation hubs around the country that connect farmers with new practices and innovations.
• $63.8 million has been allocated over the next ten years to support efforts to reduce emissions in the agricultural sector.

AI & Quantum

• $39.9 million has been committed to the safe and responsible use of AI, with $21.6 million over four years going to the National AI Centre (NAIC) and $15.7 million being allocated to develop AI policies and review existing regulations, including those in healthcare.

Cicada Innovations

Learn more about how Cicada Innovations plays a pivotal role in pioneering change and innovation in Australia's deep tech landscape.