The Business Council has a series of policy recommendations for Australia's economic and fiscal policy.
- Make Australia a more competitive and attractive investment destination. Investment is the key to productivity growth, which is in turn the key to sustained growth in real wages.
- Remove regulatory impediments that make Australia less competitive (see regulation policy for more detail).
- Reform Australia’s company tax system to restore our lost tax competitiveness and promote investment.
- Institute a series of fiscal rules that provide for real per capita spending growth, but also help Australia regain the fiscal strength we had prior to the GFC. Ensure government spending is focused, efficient and avoids duplication.
- On monetary policy, an independent Reserve Bank and a flexible inflation target of 2-3% has served Australia well.
- Together, these policies aim to deliver higher and rising real wages, above long-run average productivity growth and ensure the tax burden does not continue to rise, without impacting services.
- Return the budget to surplus to build resilience and flexibility in dealing with economic shocks and volatility; and to underpin business confidence and investment.
- Preserve Australia’s AAA credit rating to retain financial capacity and maintain investor confidence.
- Adopt a combination of fiscal rules and independent oversight and reporting, including:
- a tax to GDP cap
- a real spending cap of 2 per cent a year
- much greater transparency and independent oversight.
- Reinvigorate federal–state relationships and revisit a Federation white paper with a focus on chronic disease, the Vocational Education and Training sector, and mental health.
- Monitor and improve the productivity of government spending, including setting productivity targets for the delivery of public-sector services.
- Focus on delivering better value for taxpayers’ money by carefully redesigning programs and introducing innovations in service delivery.
- Continue with the federal government’s functional and efficiency reviews to identify both the role of government and the efficiency of program delivery. This should ensure resources align with government policy objectives.
- These reviews should encompass the rationale for and performance of more than 1,200 federal government bodies, with a view to reducing duplication and identifying scope for rationalisation.