Growing our economy by just one per cent extra a year would leave each Australian $770 better off per year and help us return to full employment, according to the Business Council of Australia’s pre-budget submission.
“May’s budget gives Australia a once-in-a-generation opportunity to build on the gains we’ve made managing COVID-19 to remain a frontrunner in the global recovery,” Business Council chief executive Jennifer Westacott said.
“But to capitalise on this and transform our economy for the future, we need to grow faster than the below 3 per cent growth rates we were experiencing prior to the pandemic.
“Every time we grow the economy by one per cent that translates to an extra $20 billion of GDP. That’s equal to more than $770 for each everyday Australian and around $5 billion more to pay for the government services we all want and expect.
“If we grow each year at more than 4 per cent until 2023-24, we would generate an extra $170 billion in GDP and around $40 billion more in revenue in today’s dollars.
“Our submission makes clear that the best way to pay down debt is to grow the economy.
“Right now, we have a window to begin reshaping our economy to create new and better jobs, equip people with world-leading skills and pay higher wages.
“This budget can’t solve all of the nation’s deeper structural problems in one hit but it can put the conditions in place for long-term growth, not a short-term comeback.
“Our focus is on four priorities: reopening the economy, putting in place the fiscal settings for recovery and growth, rebooting business investment and finetuning a workforce recovery strategy.
“Our starting point is that we cannot allow our success in managing the pandemic to become our Achilles heel. We need to manage risk, not be risk adverse.
“Reopening the economy can be safely and permanently achieved by tying the easing of restrictions to the vaccine roll-out.
“The budget needs to empower the private sector to do the heavy lifting in the economy so business can get on with creating new jobs, getting people back to work and investing.
“But one of the main roadblocks to success is the shockingly low rates of business investment. As a share of the economy, business investment is at a 28-year low.
“An investment recovery can’t just ride on the ute’s back. Support is needed for the major projects with the big multiplier effects through the economy and ongoing investment incentives for energy projects.
“We need to do everything we can to encourage big companies to make the large investments that will transform the economy and set us up for growth.
“We also continue to call on the Senate to pass practical and workable changes that go to the heart of fixing problems in the workplace relations system.
“The stakes are too high to miss out on this chance for reform. Australia needs a workplace relations system that encourages new investment and jobs to fuel our economic recovery.
“The government is absolutely right to end JobKeeper and begin the process of the private sector leading Australia’s recovery and growth phase.
“But this will be stifled at every point if we continue to have a stop-start opening and closing of our borders and locking down states on the back of a small number of cases.
The Business Council’s pre-budget submission calls for measures to:
Reopen the economy
- unlock the economy with a national risk-based plan that links the vaccine roll-out with sensible measure to unwind restrictions, and
- end knee-jerk state border closures to rebuild confidence and create new jobs.
Position the budget for growth
- put in place a fiscal strategy to support growth, and
- be transparent about the level of debt the economy can cope with and work towards that as the core target.
Drive new job creation and investment
- extend the government’s temporary expensing measure until 2023 to bring forward projects, let businesses expand and employ more people
- a broad-based 20 per cent investment allowance that makes us a more competitive place to do business, start big projects and create jobs
- make the Foreign Investment Review Board more effective by streamlining the process for low-risk investments, and
- speed up the process of getting rid of red tape which is holding back investment.
Get research and development right
- turn Australia’s world class ideas and research into jobs by setting national priorities and focussing on our existing and emerging strengths
- assistance should be scaled for impact and not be spread too thinly
- the scheme should support partnerships between universities and business, and back in the modern manufacturing strategy, and
- be willing to co-invest with the private sector and universities to grow new industries which will grow new jobs.
Build the infrastructure we need
- infrastructure projects to pursue a place-based approach
- all jurisdictions to implement best practice strategic planning and planning approvals systems that lead to faster and lower cost approvals for projects of all sizes, and
- a renewed focus on regionalisation.
Create an energy system ready for the future
- put in place a 2050 net-zero target across the economy, so everyone knows where we are heading and when we’ll get there, and
- prioritise investment incentives for the energy sector and decarbonisation projects.
Skill up the workforce and return people to work
- provide additional funding to support at least 1,000 new digital micro-apprenticeships
- give Australians the skills they’ll need for free for new jobs including the basics with a national scheme to build basic literacy, numeracy and digital literacy through a foundation skills guarantee
- properly recognise short courses and micro-credentials through a national skills passport that works like a digital CV, and
- boost women’s workforce participation by reducing the disincentives to work in the child care subsidy and increasing paid parental leave and encouraging more equal sharing of care.