Simplifying trade: How Australian exporters will benefit from the Australian budget

International business isn’t usually a big vote-winner when it comes to Australian Federal elections and so measures to make life easier for businesses operating cross-border tend to get overlooked. So you might be surprised to learn that the 2024-25 Australian Budget introduces some significant measures to simplify trade, which will benefit manufacturers and exporters alike. Here are the key things that you need to know.

Digital Trade Accelerator Program

The government will invest $29.9 million in a new Digital Trade Accelerator program, which aims to streamline international trade by digitalizing customs procedures and modernizing trade processes.

The goal is to make it easier for Australian businesses to navigate international markets and reduce red tape. If the program works the way it should, it could save exporters up to $500 million annually in administrative costs and get Australian products into international markets quickly and affordably.

Enhancing the Go Global Toolkit

An additional $10.9 million will enhance the Go Global Toolkit, providing exporters with resources and support they need to expand their reach. This toolkit includes practical guides, market insights, and advice to help businesses succeed in foreign markets.

Expanding Trade with India and South Asia

Due to its abundant and cost-effective workforce and its manufacturing base capabilities, India’s economy has been forecast to outpace the US and Chinese economies in the coming decades. That’s a key driver behind the government’s increased focus on building the bilateral trade relationship with India – it hopes to bolster overall trade numbers and supplement Australia’s diminished links with China. The 2024-2025 Budget provides for the expansion of the Australia-India Business Exchange program , which is geared to diversifying trade and helping Australian businesses build commercial ties with India and South Asia. If the program is successful, it will provide access to previously untapped markets and create opportunities for Australian companies in emerging economies.

Supporting Agricultural Exports to China

Australia’s trade relationship with China remains tentative despite the abolition of exorbitant tariffs on Australian wines earlier this year. Nonetheless, the government is doing its best to get things back on the right track – the budget allocates $2 million to support Australian agricultural exporters entering the Chinese market. This funding will help agricultural businesses navigate regulatory requirements, connect with buyers, and establish a strong presence in China.

Investment in Export Infrastructure

The Budget allocates $2 billion to enhance Australia’s logistics and transportation infrastructure , including upgrades to ports and railways crucial for export activities. Over time, modernizing Australia’s export infrastructure will enhance export efficiency by reducing supply chain disruptions and lowering the cost of logistics.

Support for Small Exporters

The Budget also extends the instant asset write-off scheme for small businesses to 30 June 2025. Under this scheme, exporters can immediately deduct the cost of new capital investments, improving their cash flow and enabling them to invest in growth opportunities more readily. This measure is expected to benefit approximately 120,000 small exporting businesses.

Reduce Overhead Costs

The Budget allocates $3.5 billion in energy bill relief , which can help exporters reduce operational costs and enhance the competitiveness of energy-intensive export industries.

Abolishing Nuisance Tariffs

From July 1, 2024, the government will abolish 457 tariffs on various goods, including toothbrushes, fridges, dishwashers, clothing, and sanitary products. This move will streamline $8.5 billion in annual trade, although the benefit appears more likely to flow to importers than exporters. By reducing tariffs on lower-value consumer products, the Australian manufacturing industry at large can focus on developing high-tech products and building export markets for them.

By investing in digital trade infrastructure, enhancing support for exporters, expanding trade relationships and abolishing nuisance tariffs, the 2024-25 Australian Budget sets the stage for a more efficient and expansive trading environment. These measures will help Australian manufacturers and exporters reduce costs, access new markets, and grow their businesses on the global stage.