The Federal Budget 2014 will affect different sectors differently. This article explores the changes ahead, the pros and cons, and how to make the most of the opportunities that the changes represent.

1. Federal Budget 2014:
Key facts & tips
insight

2. The 2014 Federal Budget has been handed down and has
been met with mixed reactions of varying degrees of support
and criticism with winners and losers across all sectors where
businesses will be effected directly or indirectly.
The government has stated that this budget is geared towards
long term economic recovery based, in part, on the Australian
business sector’s ability to diversify, to compete globally, and
to generate greater revenue.
The 2014-15 Federal Budget

3. High income
earners
The private
sector
Overview
Foreign aid
Families
Senior Citizens
Education
Health
The Public Sector
The unemployed
Young People
University Students
People with Disabilities
Low income earners
Indigenous Programs
Public broadcasting
The environment
Source: http://www.abc.net.au/news/2014-05-13/budget-winners-and-losers/5433178
Defence
Medical Research
Infrastructure
Mining

4. Any efficiencies
found in Defence
costs will be
reinvested back
into Defence.
The Government will receive
originally scheduled for
$1.5 billion
Defence
2017-2018

5. Medical
Research
Medical Research Future
Fund that will grow each
year (predicted to hit
$1 billion by 2022-23).
$20
billion
Not as fortunate, funding
for other research
organisations including the
CSIRO will be reduced by
$146.8
million
over 4 years

6. Infrastructure
for roads funding
15%
2.2 billion
The Federal Government
to contribute up to
of the value of State
investments in new
infrastructure projects.$11.6
billion
in funding for new
projects. Including:

7. of the Minerals Resource
Rent Tax
Mining
No increase
The abolition
over four years for
minerals exploration for
small explorers not
making any taxable
income access in the
form of a refundable tax
offset for their Australian
shareholders.
in the diesel fuel excise for
commercial vehicles used
in mining and agriculture
$100 million

8. A temporary increase in
the efficiency
dividend by
Public Service
$16,500
70 0.25%
Commonwealth
public servants
will lose their jobs
federal agencies are
set to be closed,
with more pending
Merging the back-end
operations of major
cultural institutions
including the National
Gallery, the National
Archives, the National
Portrait Gallery, and
the National Library
The potential sale of
Defence Housing Australia
and the National Mint

9. Environment
The abolition of the Australian Renewable Energy Agency
$2.5 billion
$460 million
over three years
$525
million
Emissions Reduction Fund will now be allocated
over 10 years, not 4 as previously planned
The Carbon Capture and
Storage program will lose
in funding for the
Green Army initiative
will be offset by a
$438 million loss
to Landcare

10. Private Sector
1.5%
cut in the
company tax rate
levy on big businesses to pay
for its parental leave scheme
A $484.2 million
Entrepreneurs Infrastructure
Programme to support the
commercialisation of good
ideas and provide market
and industry information
and advice.
Cuts to the Automotive Transformation
Scheme that was established to allow the
industry to restructure and transition for the
that will be lost when Toyota, Holden and
Ford cease manufacturing.
The elimination of eight separate industry assistance bodies and programs that perform a similar function.
1.5%
10,000+ jobs
+

11. High income earners
over four years as a tax
offset for Australian
shareholders who fund
small mineral explorers.
in the diesel fuel excise for
commercial vehicles used
in mining and agriculture.
The abolition of the Minerals Resource Rent Tax.
No increase$100 million

12. Budget time is always a good time to review your
infrastructure and practices.
While the 2014 Budget has winners & losers, its a chance
to look for the opportunities for your organisation.
So what does it mean for you?

13. A review of your current IT systems,
applications and data is an
important step.
• Identify potential redundant
systems and duplication.
• Use applications, hardware and
systems across the organisation
rather than by individual
departments.
• Consider the cost savings of
outsourcing to cloud service
providers.
1. Review your IT architecture

14. Commit to doing things in the most environmentally
responsible way possible and reduce costs.
• Set your electronic devices such as your printer to
optimise power during peak/off peak periods.
• Reduce air conditioning settings, minimise artificial
lighting and install energy efficient lighting options.
• Make turning off computers at the end of the day
company policy.
Modern devices are now smart enough to predict
patterns of use and optimise to these patterns.
2. Review your eco policy and save

15. Simple strategies can make a big difference
to business operational costs.
• Challenge your staff to find ways to do
things differently.
• Reducing the paper trail and establishing
an electronic workflow will improve
efficiencies, minimise risk of human error,
and save you money on paper.
• Offer incentives for employees who
suggest ideas that will help the company
save money and improve performance.
3. Work together to streamline processes

16. Businesses that rely heavily on transport and
distribution will incur extra fuel costs over the
next few years.
• Invest in fuel efficient vehicles; coordinate
deliveries to cut the number of trips needed.
• Train your drivers to drive efficiently; ensure
all your vehicles are properly maintained.
• Plan routes to minimise the distance,
taking into account likely road and traffic
conditions.
4. Review fleet and fuel usage

17. “The Federal Budget 2014 focused on the expenditure side of
the ledger for the longer term together with two revenue raising
measures to substantially reduce the forecasted budget deficits.
… In essence, the Government's strategy centres on
expenditure savings in the areas of health service contributions,
foreign aid, education loan programs, family and other welfare
benefits. Coupled with the reintroduction of fuel excise
indexation and a personal tax increase, the Budget savings
dramatically reduce the forecasted deficits. The Budget also
makes room for redirected expenditure priorities in infrastructure
and the establishment of a medical research future fund.”
KPMG's Federal Budget Brief 2014
A final word from the experts

18. Australian Industry Group
Chief Executive, Innes Willox
Institute of Chartered
Accountants Australia
“… many of the challenges
confronting us require
long-term solutions. We
need to remain competitive
globally into the future and
this year's federal budget
presents an opportunity to
rise to that challenge.”
“The Government's proposals to rein in
spending growth and to reintroduce fuel
tax indexation are difficult measures spread
across all sections of the community –
including businesses. In the face of the
undisputed longer-term pressures on
Australia's public finances the measures
will put the budget on a more secure
foundation and will make the Australian
economy more productive and resilient.”

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