Business-boosting Budget will need a bigger Australia

Business investment, productivity and participation measures announced in tonight’s 2021-2022 Federal Budget will be crucial as we transition our economy from being stimulus-reliant to market driven growth.

“Incentives to increase workforce participation, promote business investment and boost productivity, crucial pillars of economic success, are the standout wins for business in tonight’s Budget,” acting CEO Jenny Lambert said.

“With widespread skills and labour shortages as a result of the prolonged international border closure and decreased labour mobility, businesses desperately need government investment in skills and to help unemployed people into work,” acting CEO Jenny Lambert said.

In particular, ACCI welcomes extra investment in the following skills and participation programs, which have a track record of success:

• Extending the Boosting Apprenticeship Commencements by an extra 6 months to March 2022
• A $1 billion extension to the JobTrainer program for another 12 months to train and reskill 17 to 24 year-olds
• $150 million to establish 15 industry owned Skills Enterprises to ensure vocational training is industry led and meeting market needs
• Getting unemployed people back into work by boosting wage subsidies for eligible job seekers, an additional $130 million for unemployed people to set up their own business and an extra $481 million for the Transition to Work employment service

“It’s very good news that the Commonwealth Government has extended the highly successful Boosting Apprenticeship Commencements program by an extra six months, maintaining its 50 per cent subsidy level. It has been very popular, with places in the initial round taken up six months quicker than expected, creating tens of thousands of new job and training opportunities,” Ms Lambert said.

Productivity measures include supporting business investment through temporary full expensing and temporary loss carry back, now both extended till 2023, a new Patent Box initiative, and the Digital Economy Strategy.

“These measures are a good start to overhauling how we do business and ensure Australia remains competitive. The Patent Box scheme is an exciting development and we hope it leads to more collaboration between research facilities and industry.

“These incentives alone won’t be enough to secure our economic success. We are a middle-sized country and rely on open borders – we need to address our international border restrictions by gradually reopening international travel, and also work towards a bigger Australia.

“As our future prosperity relies on population growth, the forecasts for Net Overseas Migration are concerning, with 2021-22 predicted to still be in negative at -77,400 and only 95,900 the following year, less than half pre-COVID levels.

“We need to boost migration numbers and fill urgent skills gaps much sooner than the forecast. We can’t go it alone if we are to remain globally competitive in a post-COVID world.”