The Business Council of Australia has warned rising global instability and weak economic growth are making it harder for households and businesses to get ahead, calling on the Federal Government to deliver a disciplined Budget that also incorporates growth-targeted policies in red tape reduction, tax and housing.
In its Pre-Budget Submission, the BCA said geopolitical turmoil underscored the need for policies that respond to the crisis but also make Australia more competitive in the long-term by attracting more investment.
Business Council Chief Executive Bran Black said that Australian consumers and businesses were facing increased costs, rising inflation and low business investment, highlighting the importance of this Budget.
“When global shocks hit, Australians pay higher prices through household bills and everyday costs, so it’s vital we control what we can control and ease pressure on households through new productivity measures,” Mr Black said.
“This Budget should include reduced spending to curb inflation, significant reductions in red tape, and tax changes which drive investment and lift living standards.”
The BCA’s submission outlines a broad reform agenda to lift productivity and strengthen the economy, including:
Stronger fiscal discipline
- Cap real spending growth at two per cent a year and cap the tax-to-GDP ratio
- Stabilise and reduce government debt
- Require rigorous independent cost-benefit analysis for all off-budget investments
25 per cent reduction in regulatory costs by 2030
- Cut red tape, undertake a regulation stocktake and improve the ease of doing business, reducing costs that are ultimately passed on to Australian households, in line with calls from the Alliance of Industry Associations
- Prioritise major regulatory reviews and cost reductions in housing construction, corporate reporting and telecommunications
More competitive tax settings to support business investment
- Reject the proposed cash-flow tax, gas tax and other taxes targeting the operation of businesses in Australia that will only make consumers pay more
- Increase the competitiveness of business tax settings, such as through an investment allowance or immediate expensing
- Deliver a simplified R&D Tax Incentive to lift business R&D
Housing and infrastructure reform
- Deliver planning and zoning reform to support the National Housing Accord target
- Utilise the National Productivity Fund to further incentivise state-level reform
Reliable and affordable energy
- Release a comprehensive, technology-neutral investment roadmap to support the $400 billion in capital investment needed to meet Australia’s 2035 emissions reduction targets while maintaining reliability, affordability and international competitiveness
- Implement the Gas Market Review to strengthen energy security and affordability
Care economy and health reform
- Prioritise the inter-governmental rollout of NDIS reforms to moderate participant growth and protect the scheme’s long-term viability
- Improve governance within the care sector, particularly in the NDIS, including a stronger crackdown on poor practices and fraud to restore confidence in the scheme
- Implement greater collaborative commissioning of health and care services to deliver greater efficiencies, reduce duplication and improve access to services
- Establish a Digital Health and Care Interoperability Incentive Fund
- Progress the Health Technology Assessment Review
Addressing workforce shortages and labour market flexibility
- Sustainably increase skilled migration to help build houses and fill shortages across the economy, including in the health and aged care sectors
- Develop a population plan that sets skilled migration as a stable share of Australia’s population, integrated with state and territory infrastructure planning
- Reform enterprise bargaining to ensure it only commences with majority employee support and restore intractable bargaining determinations to the pre-February 2024 position
- Restore flexibility and simplicity in labour hire, independent contracting, gig work and casual arrangements
Innovation, digital capability and technology adoption
- Announce an implementation plan and fund initial recommendations in response to the Strategic Examination of R&D
- Abolish or lift the R&D Tax Incentive expenditure threshold to $250 million
Mr Black said Australia must lift its performance in attracting international investment, with the BCA’s Global Investment Competitiveness Index ranking Australia just 21st out of 42 countries.
“Countries are working harder than ever to win investment, and when it goes elsewhere, it takes Australian jobs, wages and opportunities with it,” Mr Black said.