Business and industry groups have presented their pre-budget submissions ahead of the Federal Budget next week, with a strong focus on productivity and innovation.
According to the Business Council of Australia, the country is facing a “difficult balancing act” between responsible fiscal management and investing in Australia’s future growth.
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“The BCA is calling for a shift in the emphasis of fiscal policy away from settings that support demand management to a renewed focus on expanding Australia’s productive capacity,” it says.
“This will entail a withdrawal of the stimulus, a return of the budget to surplus and a strengthening of Australia’s long-term fiscal and economic growth prospects.”
The BCA wants a long-term infrastructure plan to promote productivity and growth, and a three-pronged plan to address skills shortages.
The Australian Chamber of Commerce and Industry also wants the Government to honour its promise to return the budget to surplus, and should focus on spending cuts rather than raising taxes.
The ACCI wants the Government to look at reducing personal and business tax rates and abolishing payroll tax, as well as broadening the base of the GST.
Heather Ridout, chief executive of Australian Industry Group, would like to see a lift in the nation’s productivity and capacity.
“We need capacity to build capacity. This calls for a budget that delivers a major re-prioritisation of effort in favour of measures that build productivity and capacity by building skills, innovation and business capabilities,” Ridout says.
“It calls for a budget that adds to immediate capacity by raising net migration, and it calls for a budget that ensures we maintain a balanced and diversified economy that is not overly reliant on a small number of commodity exports to a handful of countries.”
According to AIG, the Government needs to encourage business investment in innovation, which will “drive a more balanced economy that will build our capabilities beyond mining in areas such as high value-added manufacturing”.
Among the items on AIG’s budget wish list are the following:
- Address the “serious flaws” in the current proposal to change the research and development tax incentive, which came into effect on July 1, 2010.
- Extend and strengthen the place of innovation capabilities within Enterprise Connect.
- Support the creation of an Australia-led regional innovation network linking businesses and researchers in the Asia-Pacific.
- Assist in growing the capabilities of businesses, including by restoring appropriate levels of funding to the Export Market Development Grant Scheme, and helping share best practices in industrial energy efficiency.
The Urban Taskforce has also announced its expectations for the budget, arguing the Government needs to support new urban infrastructure projects without imposing any new property taxes.
“Even if specific projects aren’t identified in the budget… the Government should be prepared to commit to an overall capital spend for new projects in the forthcoming financial year and forward estimates period,” Urban Taskforce chief executive Aaron Gadiel says.
Gadiel says the Government should also avoid any new taxes that could damage efforts to reduce the national housing undersupply.
“We’re concerned at reports that the Federal Government is considering a new vendor tax for property investors and restricting negative gearing for investors in multiple properties,” he says.