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Budget shifts gear to the longer term

“From an industry perspective, the Government’s second budget in a year locks in the recovery from recession and shifts gears from emergency measures to investing in the economy for the longer term,” Innes Willox, Chief Executive of the national employer association Ai Group said.

“The significant investments in skills and training, alongside the focus on social spending including on aged care and the NDIS, make this a forward-looking Budget. The Budget makes a substantial investment in the JobTrainer Fund; significantly expands the Boosting Apprenticeship Commencements wage subsidy; lifts Commonwealth funding for pre-schooling; increases funding for short courses; and offers substantial resourcing of reforms to skills development including to improve the responsiveness of training to industry and employer needs.

“These measures will over time help people move into higher paying jobs, assist in addressing rapidly growing skill shortages; and, over coming years, will be critical to lifting our lagging productivity growth.

“We also welcome:

  • The extension of the immediate expensing of capital investments by small and medium-sized businesses;
  • The extension of the loss carry-back provisions;
  • The extension of the HomeBuilder initiative;
  • Improvements to childcare to lift the workforce participation of parents with young children;
  • The focus on better equipping businesses and the workforce in the digital economy;
  • Improvements to employee share ownership tax arrangements;
  • The introduction of the patent box for some industries and the commitment to explore opportunities for its expansion;
  • The simplification and improved access for smaller businesses to the anti-dumping regime;
  • The commitment to restoring the permanent migrant intake to 160,000 annually.

“A key to building on these measures and promoting further growth and opportunities is the reopening of the economy. Greater efforts should be made to develop and stick to a more ambitious plan to reopen our borders to migration and trade in services to drive our economic recovery.

“Ai Group supports the broad Budget strategy of using fiscal policy to maintain the growth of activity and employment. While the economy has recovered more rapidly than expected, unemployment and underemployment remain too high and with inflation relatively low, we welcome the further fiscal stimulus including through extra income tax relief, the additional infrastructure spending and the extension of a number of stimulus measures.

“The budget anticipates a period of steady expansion and strong employment growth without creating undue inflation and overall wages pressure. The outlook for business investment is expected to take some time to recover with most of the increase anticipated in the Budget held over until 2022-23.

“Ai Group supports the Budget’s emphasis on social spending. There is a clear need to improve the quality of aged care in Australia and the improvements to the NDIS are welcome steps. The emphasis on mental health is very welcome at a time when there is growing recognition of the importance of mental health in workplaces and of the important contributions that work makes to restoring and maintaining mental health.

“The longer-term budget strategy of returning the Budget to a position of fiscal sustainability built on the growth of the economy, higher levels of employment and a more skilled and productive workforce is commendable. We cannot bank on high commodity prices and strong demand for iron ore to shore up the budget indefinitely and we need to build a more diverse and dynamic economy.

“In this context the Budget’s emphasis on education, training and skills development is positive and necessary. Momentum on developing our workforce skills will need to be complemented with more decisive measures to lift business investment and the pace of innovation. These are the fundamental drivers of productivity and ultimately of sustainable improvements in real incomes,” Mr Willox said.

Source: Ai Group