Every year as the federal budget is delivered, I join the Chamber’s Policy and Advocacy team in our boardroom to dissect and distil the information, looking for the policy measures that will drive business productivity in Australia.
With laptops at the ready and fortified by a few slices of locally made pizza, the session starts with a sense of anticipation and all too often ends in disappointment.
This year was one of those times.
This budget has been referred to as one that the Government did not want or expect to deliver. Perhaps that is why it comes across as a grab bag of short-term offerings to court voters, rather than a cohesive document with a clear theme and vision.
The absence of real policy for business in this budget makes us wonder what has been held back for a pre-election pitch?
Businesses across the country are facing a range of challenges — rising costs in energy, wages, insurance and inputs; finding and retaining skilled workers; and more than ever dealing with complex regulations that lead to unproductive time dealing with red, green and white tape.
The Treasurer did make a statement about the “private sector resuming its rightful place as the main driver of this growth”, unfortunately that’s all it appeared to be – a statement. The policy and reforms required to support such a claim were absent.
Where were the initiatives to move to a reliable, low-cost energy supply? To reduce complexity and red tape, to reform our taxation model, to encourage business investment, or build capability in areas such as the digital landscape that we know can improve productivity, especially for small business.
Big ideas were scarce all round, but even a small target that we would have considered a “lock” for business was missing.
It was surprising that an extension of the instant asset write-off for small business has been excluded. We believe it should be a permanent feature of our tax system and increased to $50,000.
In an interesting piece of timing, legislation was passed last night to allow the $20,000 write-off that was announced a year ago, to apply for this financial year.
The fact this has taken so long and become a political bargaining pawn, reinforces the need to have it permanently locked in legislation.
The banning of non-compete clauses for employees earning under $175,000 was a notable inclusion and I will leave that topic to be unpacked at a later date when more detail arrives.
I’m yet to speak to a business owner excited about a $150 rebate off their energy bill. As energy costs rise 20% and beyond year after year, sentiment has been that the billions of dollars offered on small rebates would be better spent on long term energy supply initiatives, such as securing additional supply of gas as we transition to net zero.
There has also been commentary about the return to deficit in the budget.
This had been forecast, but what has piqued interest is the ongoing deficit in future years and an increase in debt. The government coffers have benefited off the back of high commodities prices and a low unemployment rate. If the gloss comes off as the Chinese economy slows and we see unemployment rates return to more historic norms, all against a backdrop of global economic uncertainty and trade tension, it might be preferable to have a buffer to cushion our economy.
The pizza went cold as we tried to find the hidden gems that might help our members.
Obviously, the investment in Whyalla was already known. It is welcome and critical for the Upper Spencer Gulf and our state.
The childcare support package of three days per week should hopefully make it easier for the primary carer to transition back into the workforce, enabling employers to draw on a bigger pool of workers.
Having a national licensing scheme for electrical workers makes great sense, but why stop there? Wouldn’t this be of value across all our key trades? It would certainly make it easier to attract skilled workers from overseas who could land in Australia, pick up one ticket and head seamlessly to where the demand is for work.
There was also good news for our brewers, distillers and wine producers. As the leading wine state in the country, our battling local winemakers will be pleased to see the cap on the WET (Wine Equalisation Tax) increased to $400,000, although many will remember a time less than a decade ago when that number was $500,000.
While the Government might be hoping that sweeteners such as personal tax cuts entice voters, for either side to woo the business community on election day, there is still plenty of work to be done.
If, as polls suggest, the victor will be holding the slightest of majorities, it will be unlikely that we will see the real reform required to drive innovation and productivity. Dealing with crossbenchers will be the order of the day.
Still, it would be refreshing to see one of the major parties step forward and put business firmly on the agenda between now and the mystery Saturday in May when we hit the ballot box. They might be pleasantly surprised how many votes there are in that approach.
