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Tackling inflation and the skills shortage should be top of the government’s to-do list, say Ai Group and BCA.
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Business groups call for budget focus on growth, productivity
02 February 2023
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10 minute read
The budget needs to boost economic growth and productivity by addressing the skills shortage, while also ensuring the economy returns inflation to the target of 2–3 per cent, according to the Australian Industry Group (Ai Group) and the Business Council of Australia (BCA).
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Ai Group chief executive Innes Willox said the budget was crucial for the government to address workforce shortages and productivity while also aiming to reduce inflation.
“The May federal budget is an opportunity to refocus and sharpen the government’s contribution to addressing entrenched low productivity and to strengthen workforce growth while also supporting efforts to avoid a price-wage spiral,” said Mr Willox.
“Ai Group’s current assessment is that Australia is very close to the point of macroeconomic adjustment where the economy will slow sufficiently to reduce inflation to target levels.”
“In this assessment the budget should avoid stimulating spending and prices and also avoid adding to contractionary pressures.”
BCA chief executive Jennifer Westacott agreed and said the budget needed to transition the country away from the reliance on the government.
“This is about driving businesses to invest, making sure we don’t leave anyone behind and delivering the things Australians want with faster economic growth and better opportunities,” said Ms Westacott.
“Right now, we have a window to begin reshaping our economy, create new and better jobs, equip people with world-leading skills and pay higher wages.”
“We’re outlining a set of actions to drive investment and fuel the productivity needed to deliver higher wages, strengthen existing industries and build new ones.”
As part of the push to increase productivity and strengthen the economy, BCA recommended the government enhance skills and training through the Trusted Trainer model to up-skill Australians and attract the most skilled workers from around the world.
The Ai Group’s budget proposal agreed, calling for an expanded and reinvigorated apprenticeship system and greater support for higher-skill apprenticeship programs, as well as establishing a new national internship and cadetship program that encourages businesses to provide employment opportunities for VET and higher education students.
Both groups also recommended reforms to reduce the barriers for those looking to either return or join the workforce.
BCA recommended paid parental leave reform with improved sharing of caring responsibilities, expansion of the Foundational Skills Guarantee to cover more programs, increasing the number of people who can engage with targeted training, and childcare reform.
The Ai Group recommended an improvement to the early childhood education and care options, so that they were more affordable and flexible, while also better targeted to the needs of working households to accommodate flexible working and shift arrangements.
Other key recommendations made by the two business groups included:
- The Ai Group recommended the government increase its migration planning levels for permanent migration in 2023–24 from 195,000 to 220,000, with two-thirds allocated to skilled migrants.
- BCA recommended the government establish a broad-based, permanent investment allowance applicable to all investments depreciable under current tax law to support flagging business investment.
- The Ai Group recommended the government increase its funding for the Fair Work Commission’s registered organisations governance role along with the Fair Work Ombudsman’s role in the building and construction sector, to ensure there was effective governance and compliance across workplace relations arrangements.
- BCA recommended the government undertake micro-economic reform by removing obstacles to growth and unnecessary barriers to business through consistent and modern regulations as well as investment to become a world-leading digital economy by 2030.
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