With the Coalition government less than one month in power, research analysts IBISWorld have released a report showing a positive outlook for the business community.
The report, ‘The New Coalition Government and Australia’s Industries’ looks at how Prime Minister Tony Abbott’s government will impact various areas, including the economy, energy and resources, workplace relations, and infrastructure and development.
IBISWorld finds that the “stability of the new government will be particularly beneficial to the economy”, and “will go even further to provide support for business and a long-term approach to economic sustainability”.
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Here, SmartCompany have compiled the key predictions from IBISWorld about the next three years with Abbott in the hot seat.
IBISWorld says the Coalition is “widely viewed” as the more business-friendly of the major parties and will endeavour to pass legislation that preferences small businesses.
It reports the National Broadband Network “is likely to be completed sooner under the Coalition’s fibre-to-the-node plan”.
“This should allow more Australians to take advantage of the economic potential of the internet sooner, but the slower speeds of the Coalition’s NBN will reduce the long-term return of the network.”
The report says that the pledged infrastructure projects will provide stimulus and “help the economy transition from the mining investment boom”.
IBISWorld says the government is expected to run a tighter budget, which will “reduce some of the upward pressure on interest rates, helping struggling mortgage holders.
“Lower interest rates will also help keep the Australian dollar down, which will assist companies to compete internationally,” it says.
Energy and resources
Energy policies are a key area where the Coalition’s policies differ from the previous Labor government.
IBISWorld says the Coalition is likely to review gas reservation, export policies and repeal the Minerals Resource Rent Tax.
IBISWorld expects that the proposed removal of the carbon tax and the shift to an emissions trading scheme will be challenging to pass in the Senate.
“Any changes to the carbon tax would also need to be included in the federal budget. Based on these factors, IBISWorld forecasts that the carbon tax is unlikely to be repealed before January 2015.”
IBISWorld predicts that the Coalition’s intended removal of regulatory restrictions on employment growth and business development will be cheaper in the long term than subsidies and regulation.
A key move planned by the Coalition is to reinstate the Australian Building and Construction Commission, which could rewrite the National Construction Code to grant building approvals more easily.
“This move is anticipated to counteract the Construction, Forestry, Mining and Energy Union’s power,” IBISWorld reports.
“Other union-related policies include the lessening of ‘union-friendly’ workplace arrangements for government projects, such as public infrastructure construction. This would further weaken government ties with unions, especially as the Coalition proposes limitations on union negotiations for new projects.”
The proposed Paid Parental Leave Scheme, to be implemented from July 1, 2015, could extend the time before parents need to return to work after the birth of a child, which could also benefit the baby product industry economically, IBISWorld predicts.
The delay of superannuation contribution increases by two years will allow businesses more breathing room with cost structures, and will ultimately mean more take-home pay for employees, IBISWorld writes.
IBISWorld forecasts that average weekly earnings will increase at an annualised 4.3% over the three years through 2016-17.
Infrastructure and investment
The report forecasts that capital expenditure by the public will increase at an annualised rate of 5.2% over the three years through 2016-17.
While the Coalition was in favour of a high-speed rail network, IBISWorld says public funding will be difficult to attract.
Regarding the National Broadband Network, under Labor, full completion of the NBN was scheduled for 2021 and was estimated to cost $44.1 billion. IBISWorld writes that the Coalition’s proposal will cost $29.5 billion and take two years less to complete.