From changes to R&D to support for women: Here’s what we think the budget will include

The Treasurer Josh Frydenberg will deliver his third federal budget tonight in Parliament, and his second budget in just six months.

And while the Morrison government has made a few sure announcements about what the budget will include, it has left a lot open for discussion.

Here’s a list of what we’re expecting will be addressed in tonight’s highly anticipated budget.

Extension to low and middle income tax offset 

Pre-budget reports suggest the government will extend a temporary tax cut for low and middle income earners for another 12 months, as part of a plan to maintain confidence in the economy.

The low and middle income tax offset was due to finish at the end of this financial year; however, the government is reportedly planning to use the upcoming federal budget to extend the tax cut for another 12 months.

The offset gives low and middle income earners an end-of-financial year rebate of up to $1080 for singles and $2160 for couples.

Continuing the offset for another year is expected to benefit approximately 10 million Australians, and cost $7 billion to the budget bottom line.

More changes to R&D

Last week, a select committee on fintech and regtech released its second interm report, recommending R&D Tax Incentive (RDTI) payments to be paid out on a quarterly basis.

The recommendations came just over one week before the federal budget, meaning the government could take on advice from the industry that was submitted to the committee.

The Senate Select Committee on Financial Technology and Regulatory Technology suggested that different assessment methodologies should be used for the scheme.

“Consideration” should also be given to a separate, standalone RDTI scheme for software startups, it said.

The committee also advised that payments for successful applicants should be made on a quarterly basis, to help businesses with cashflow without increasing the overall cost of the scheme.

More to support women

The government is expected to deliver a women-focused budget tomorrow, after it faced criticism last year for not doing more to address women’s economic security.

The government first announced it would address the super gap that exists between women and men in April, with the expenditure review committee looking at ways to enable women to top up their super.

But super disparity is just one part of addressing the gender inequality puzzle.

A group of leading women and representatives of parents, including Georgie Dent, executive director of The Parenthood, and Michele O’Neil, president of the Australian Council of Trade Unions, signed a joint policy statement urging the government to prioritise the economic security and safety of women.

The statement called for reforming early childhood education, paid parental leave, funding for family and domestic violence services and funding for aged care.

Of those demands, we’ve seen the government pledge an additional $1.7 billion in funding for childhood education and a reported $18 billion for aged care.

Cybersecurity for SMEs

Members of the business community, including CPA Australia, have called for the government to invest more in cybersecurity in this year’s budget.

Despite the government announcing a $1.2 billion digital economy plan, only $50 million will be spent on cybersecurity services in government, data centres and telecommunications networks. Of that funding, none has been specified for small and medium businesses.

Over the last 10 years, the government has committed $1.66 billion over 10 years in cybersecurity grants, and just last week $6.9 million in grant funding awarded under the government’s Cyber Security Business Connect and Protect Program.

Whether we’ll see more grant initiatives backing projects that help small businesses identify and address security risks will be revealed tonight.

Extension to JobTrainer

The federal government’s JobTrainer program will reportedly extended for another 12 months, as part of a plan to ensure young Australians have in-demand skills.

The extension of the program, which will likely be delivered through a $1 billion package in the May 11 budget, will offer thousands of Australians low-fee or free courses in fields such as IT, aged care and childcare.

JobTrainer has been a two-pronged program, with one part offering affordable training to young adults through a partnership with state TAFEs. The second function of JobTrainer is to give employers a 50% wage subsidy of up to $28,000 per year, if they hire a young person.

Overhaul of employee share schemes

As part of the budget, a $500 million reform to employee share ownership schemes will reportedly boost incentives for startups and emerging businesses to offer their staff equity.

Employee share schemes (ESS) give employees the benefit of buying shares in the company they work for at a discounted price, or the chance to buy shares in the company in the future.

Currently, employees are eligible for tax concessions on shares owned through an ESS. However, once an employee leaves a workplace, those concessions are no longer applied to their shares.

As part of the government’s $500 million overhaul, former employees will not be required to pay tax on shares after they leave a business.

And, for unlisted companies, the cap on the value of shares sold or lent to employees will increase to $30,000, up from $5,000.