BCA Budget Submission Outlines ‘Top Five’ Economy Target for Australia by 2012

The Business Council of Australia is calling on the federal government to commit to real improvements in federal–state relations, as well as reversing Australia’s declining business tax competitiveness, as major reform priorities for 2007.

In its federal Budget Submission released today, the BCA also announced it would release a set of ‘reform standards’ covering key areas of national economic policy in the coming months.

These reform standards would be applied by the BCA during the course of the election year to assess the policies of all political parties to determine whether these policies continue to pass on Australia’s current prosperity or erode it.

As the BCA’s submission outlines, the standards being developed by the BCA are the necessary conditions to elevate the country’s living standards into the world’s top five band by 2012.

BCA President Michael Chaney said major improvements to federal–state relations that enable long-term solutions to address critical national issues such as business red tape and water, as well as business tax reform, will form two key planks of these standards.
 
“The BCA believes Australia needs to set ambitious goals if we are to make the most of our current prosperity and potential,” Mr Chaney said.

“Occupying a top five position among the world’s major economies is a highly achievable objective and one we need to strive for if we are to preserve prosperity into the long term and make sure this period of growth is not a one-off.”

The BCA represents Australia’s leading 100 companies which in turn collectively employ nearly 1 million Australians and account for around $350 billion of the nation’s economic activity.

The BCA’s submission argues that political leaders need to recognise the challenges faced by our economy today – such as water, climate change and the ageing population – are different from the past, and to address them a more strategic decision making framework is required.

To coincide with the five-year anniversary of the release of the inaugural 2002 Intergenerational Report, which focused on the long-term fiscal challenges of an ageing population, the BCA submission calls on all governments to use the report as a template to plan for and invest in – as well as assess and update on a regular basis – the performance of far-ranging policy reforms that sustain growth and prosperity.

In particular, the BCA’s submission calls for the federal government to expand its intergenerational focus in this year’s Budget to commit to:

  • Comprehensive business tax reform to arrest Australia’s declining business tax competitiveness, as well as to provide a secure revenue source to meet the growing demands of an ageing population.
  • A major improvement in federal–state relations processes so governments better anticipate and respond to current and future challenges in a cooperative way, rather than resorting to finger-pointing, blame-shifting and short-term ‘quick fixes’. 

In terms of key, immediate outcomes from improving federal–state relations in 2007, the BCA is calling on the federal government to work with the states to drive the implementation of truly national reform of business red tape, and to ensure the new framework announced last month to fix Australia’s water crisis results in major improvements to national water management.

On business tax, the BCA is calling for the federal Budget to outline a tax reform plan that turns around our declining business tax competitiveness and allows Australia to stay ahead of what is an increasingly fast-changing global tax environment.

“These priorities reflect the need to sustain a world-class business environment and to lay the foundations for passing on prosperity to future generations” Mr Chaney said. 

“With 81 per cent of all employed Australians working in the private sector, 55 per cent of people owning shares directly or indirectly, and strong corporate tax revenues underpinning the federal budget surplus, never before has economic prosperity in Australia been more closely linked to the business sector and its performance.

“The BCA acknowledges that state and federal electoral cycles can truncate the timeframes for decision making. 

“But if we are to tackle long-term challenges, Australia cannot allow elections to be yet another reason for not taking the hard decisions and for inaction.

“In fact, the BCA sees the 2007 election as the platform for policies and commitments that will allow Australia to reach its full potential as an economy.

“Strategic vision cannot apply in only two out of every three years at the federal level.  Nor does the BCA believe that is what the Australian public expects or wants.” 

“To achieve a place in the world’s top five economies we need a long-term vision for Australia.” 

BCA Budget Submission: Executive Summary

BCA Budget Submission 2007–08 ( full version, 4MB)

BCA Budget Submission 2007–08: Part 1

BCA Budget Submission 2007–08: Part 2