The 2014–15 Budget has the opportunity to set Australia up for sustained economic growth if it puts the fiscal strategy back on track.
The Business Council of Australia 2014–15 Budget Submission calls for a decade-long, three-pillar strategy to repair the budget and grow the economy, centred on correcting expenditure, strengthening the revenue base, and strong economic reform.
The submission recommends six immediate priorities for the budget and economic policy in 2014. Through the six recommendations, the BCA is calling on the government to:
- comprehensively respond to the National Commission of Audit’s findings and recommendations
- outline a realistic and credible timeline to return the budget to surplus, including the extent to which alternative assumptions around forecasts could impact the timing
- outline a refreshed fiscal strategy that includes new fiscal rules including a cap on tax as a proportion of GDP and keeping real spending growth below 2 per cent
- promote stability and certainty for business by refraining from introducing any new changes to the business tax system
- use the tax white paper process to begin removing inefficient state taxes and improve the mix of indirect and direct taxation over time
- use the budget to map out a bold, growth-oriented, long-term economic reform agenda.
As the BCA argued in its Action Plan for Enduring Prosperity in July 2013, and its Submission to the National Commission of Audit (incorporated in this Budget Submission), only strong budgets and bold reforms will be able to sustain the kind of economic growth and improvement in living standards the community has come to expect.