Strong budget, strong economy, strong Australia

The Business Council today releases its 2020-21 budget submission which backs the return to surplus, calls for an unprecedented focus on accelerating economic growth, and a renewed focus on planning for the long-term.

“We believe a strong budget is vital for Australia’s long-term prosperity,’’ Business Council President Tim Reed said.

“A surplus, even a small one, is important and is much more than a book keeping exercise. Balancing our budget protects the nation from economic shocks and gives us a crucial platform to grow the economy.

“Absent an external shock, Australia cannot afford to casually slide into another decade of deficits. Ongoing deficits have serious consequences, and prevent us from getting on top of the interest payments needed to service debt.

“We spent about $19 billion on interest payments last year which is money that could be spent on vital services such as world-class hospitals, schools and transport services, or to lower taxes,’’ Mr Reed said.

Business Council chief executive Jennifer Westacott said: “After a decade of deficits, Australia has finally balanced its budget. However, economic growth is slow and the nation continues to face global uncertainties.

“An economy growing below 2 per cent will simply not deliver the jobs, higher wages, improved living standards, and the tax revenue to fund services that Australians expect.

“Our focus must now turn to getting the private economy to work harder so it can do the heavy lifting and accelerate economic growth. This means the conditions for business investment must improve and the economy needs to be more competitive

“The underlying structural weakness in growth cannot be solved by short-term stimulus or rushed expenditure on projects,’’ Ms Westacott said.

The Business Council’s submission therefore calls for a focus on:

  • Urgently creating a better environment for business investment by introducing a broad-based investment allowance to drive higher growth
  • Overhauling and reducing unnecessary regulation which is stalling business investment
  • Delivering infrastructure projects that make it easier to do business, export our products and reduce congestion
  • Lifting Australia’s performance on skills with a revamped skills system so Australians can secure high-paying and high-skilled jobs and also thrive as technology changes. A highly-skilled population works to attract the best companies in the world to operate and invest in Australia, and
  • Introducing a new industry policy to build on our strengths and embrace new opportunities.

The submission also urges a renewed focus on planning for the long term by reforming the Intergenerational Report and mapping out a course for long-term tax reform. 

“Compiling a full picture of budgets across all levels of government and the major risks Australia faces would improve combined policy responses to longer-term structural spending and economic pressures. It could also help pave the way for long-term and sustainable tax reform across the federation to better meet our challenges,’’ Ms Westacott said.

“Budgets are always about choices. Australians are calling on the government to choose strong communities, strong businesses and a strong Australia in 2020.’’

Read the Business Council’s full submission online here.