The Business Council of Australia has today released its 2011–12 Budget Submission, which contains six recommendations for the government that are focused on the themes of fiscal sustainability, enhancing productivity and improving government.
With recent events and challenges, including this summer’s floods and cyclone, getting the fiscal settings right this year will require a greater than usual degree of judgement on behalf of the federal government. The current uneven pattern of economic growth is also complicating the policy equation but we believe that the need for fiscal policy to stimulate the economy has passed.
Our submission argues that tight fiscal policy that returns the budget to surplus, combined with measures to boost productivity and workforce participation are warranted, recognising that this will help take pressure off monetary policy and interest rates.
Recommendations made include measures to strengthen fiscal accountability through the establishment of a Commission of Budget Integrity, measures to improve transparency around the sensitivity of the budget to movements in commodity prices, consideration of a new Natural Disaster Fund to assist in the budgeting of future catastrophes, measures to address skills shortages, and a refreshed mandate for Infrastructure Australia.
The submission is supported by two background papers commissioned from Access Economics and a former Department of Finance official Stephen Bartos of the Sapere Research Group.