Australian industry groups have issued their response to the Albanese Government's first budget. Here, Ragtrader rounds up opinions on the funding measures and reforms.
Australian Retailers Association (ARA)
The Australian Retailers Association (ARA) has welcomed the Albanese Government’s first budget for its social reforms, including greater access to child care and paid parental leave.
“The Albanese Government’s first budget has been handed down with a backdrop of increasing global economic uncertainty and growing cost of living pressures. Inflation is forecast to peak at 7.75% later this year and our economy is set to slow to 1.5% growth in 2023-24, highlighting the scale of the challenges that lie ahead for business and all Australians,” said ARA CEO Paul Zahra.
“With many households facing financial stress, we’re pleased to see the cost of living a key focus. The $7.5 billion package which includes cheaper child care and the expansion of paid parental leave will help ease the pressure on families and improve the economic participation of women – a key focus for retail, given the sector has one of the highest percentages of women in its workforce. We commend the Government for embarking on these bold social reforms and for making women and gender equality a budget priority.
“The more immediate challenge for retail is the jobs and skills crisis, which is worsening in our sector with job vacancies at over 46,000 and one of few industries that recorded an increase in vacancies last quarter. We acknowledge the $1 billion agreement to provide 180,000 TAFE and vocational education places in 2023 but seek clarity on how these will target traditional retail skillsets.
“We note that the Government is following through on its commitments out of the Jobs and Skills Summit, including funding to speed up visa processing times, and allowing pensioners to earn more without their entitlements being affected. These are positive measures that the ARA has been advocating for to get more people into the country and to harness the existing talent we have here now.
“Many small businesses are significantly challenged with rising costs, and while we acknowledge the $62.6 million in grants that have been announced to help SMBs become more energy efficient – we would like to have seen more targeted support to help these businesses with cash flow challenges. Continuation of the instant asset write-off and 20 per cent tax deduction boost for small businesses to upskill employees and support the uptake of new technologies will also help improve digital capability and productivity.
“The ARA has welcomed the paid family and domestic violence leave as another important area of social reform. We also advocated for and welcome the $3.4 million over four years to support small businesses to understand and implement this legislation.
“The next great disruptor for the retail sector and the Australian economy is climate change, and we welcome the resilience measures in this budget to help with climate change and disaster preparation, as well as changes to support electric car use by business and the community.
“While the retail sector overall remains resilient, we are cautious about the economic outlook as the impacts of rising interest rates wash through the economy and as households tighten their budgets, which could lead to a slowdown in spending in 2023.
“We commend the Albanese Government on their first budget, however there’s no doubt that challenging times lie ahead with the prospect of a global economic downturn,” Zahra said.
Council of Small Business Organisations Australia (COSBOA)
COSBOA CEO Alexi Boyd rated the budget 7/10 for small businesses, describing it as a solid program for the post-COVID era.
“This budget delivers benefits for small business owners and sole traders in four key areas, namely: improved internet connectivity, small business mental health support, cost of living improvements to childcare support, and VET & skills planning. It is critical to ensure the benefits flow through to small businesses. They must be included in the design and implementation of all of these measures.
“Small business owners have been waiting for this budget to provide them with certainty of the business horizon so they can plan for their futures.
“As 98% of businesses in Australia are small and medium sized enterprises and a third of this group are sole traders, the small business sector is a major stakeholder in this budget and its impacts will be felt in almost every home across the country,” said Boyd.
“This is a relatively positive budget for small business. However, the implementation needs to include consultation with small business, so we don’t have unintended consequences for the sector that represents 2.4 million businesses and their employees.
“COSBOA and its members will continue to advocate for the issues affecting 98% of the business market – small and micro businesses, and ensure their voice is heard through the implementation phase of this budget.
“With rising inflation, increasing cost of doing business, the debt from the COVID-19 crisis, increasing interest rates and work force challenges, we need to ensure our small businesses are protected like never before.
“We look forward to working with the Government to build on this budget and to ensure stability and assurance for small businesses everywhere."
COSBOA and Boyd also drilled down on specific budget measures in their response:
INTERNET CONNECTIVITY
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$2.4 billion in NBN Co to extend fibre access to 1.5 million more premises and $1.2 billion for the Better Connectivity for Regional and Rural Australia Plan. COSBOA believes this is a positive step in meeting the needs of every small business.
“All businesses, regardless of their location, need connectivity to enhance their digital journey and to access critical online services needed to grow."
“Small businesses need reliable internet connectivity to run their businesses including engaging with customers, receiving payments, conducting online training and engage with the government. This is a positive step to recognising this need.”
CHILDCARE
Support for small business owners can come in the form of childcare support but COSBOA remains concerned about the lack of information about support for Before and After School Care. Many small business owners, particularly women, rely on this service to ensure they can work in their business for a full day. Too often there is an expectation that the small business owner can do school drop-offs and pickups, taking hours of productivity away from their business.
“COSBOA welcomes this sensible adjustment to the program that many small businesses rely on. The high cost of childcare is a career barrier for many female business owners – on whom the burden of at-home childcare still disproportionately falls even in the modern era.
“Lowering the cost of childcare will give women entrepreneurs more time and freedom to focus on running and growing their businesses.” However, it is important for these business owners that before and after school care is part of the conversation.
VET & SKILLS
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The Government is delivering 480,000 fee-free TAFE and community-based vocational education places over 4 years. As a first step, the Government is entering a $1 billion agreement with the states and territories to provide 180,000 places in 2023.
It is positive to see for sectors where TAFE doesn’t meet the needs of small business, private RTOs are considered an important part of the solution for small business, Boyd said.
Jobs & Skills Aust
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The Government will establish Jobs and Skills Australia to strengthen the nation's workforce planning, help address workforce shortages and build long-term capacity in priority sectors. Jobs and Skills Australia will take a tripartite approach to workforce planning. This will help to better identify current and future skills and training needs by bringing together employers, employees, governments and training providers.
It's positive to see the Government has the intention to ensure small business representation on the JSA governance and working groups. We will continue to work with the Government to ensure that the skills need of small businesses are met.
Skilling the clean energy workforce
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The Government is addressing growing skills demands in the clean energy sector by committing over $100 million to the New Energy Apprenticeships and New Energy Skills programs. The programs will help apprentices acquire necessary skills by developing a new mentoring program and providing up to $10,000 for each apprentice in a clean energy role.
COSBOA would hope any wraparound services would extend to other industries where apprenticeship retention and completion rates are waning.
MIGRATION
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The permanent Migration Program will be expanded to 195,000 in 2022–23. This is an increase of 35,000. More than 90 per cent of new places will be for skilled migrants, and more than a quarter targeted to regional areas.
COSBOA supports increasing the permanent migration program and additional funding for speeding up the processing times. Providing better pathways for permanent residency is critical, particularly for small businesses in regional areas where they are crying out for skilled migrants.
“COSBOA will continue to work with the government to ensure that the Migration Strategy meets the needs of the small business community. We want to ensure that the associations which represent small business are at the strategic end of workforce planning consultation."
INDUSTRIAL RELATIONS
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The Government will also provide additional support to help employers and employees reach agreements and resolve disputes, with improved access to arbitration for intractable disputes. Together with increased bargaining support for small business and an investment in the Fair Work Commission's expertise, more businesses will be supported to reach agreements with their employees that improve pay outcomes.
“Australia needs an IR system that is simpler and more accessible for small business to allow them with more flexibility and ease of employing people in ways that meets the modern workplace challengs,” Boyd said.
COSBOA continues to seek ways to make it easier and provide more practical support for small business to engage in flexible and appropriate workplaces so they can ultimately employ more people. Which is good for business, and good for the economy.
However, more work needs to be done to understand what the on-the-ground impacts will be of the legislation changes.
“We are focused on creating pathways to making the IR system more accessible to small businesses if they choose to opt in. However, it is the practical application of any changes that will be the test."
FIGHTING ONLINE SCAMS
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Initial investment of $12.6 million over 4 years to combat scams and online fraud. This includes establishing a National Anti-Scam Centre and more funding for identity recovery services to support victims of identity theft to recover stolen credentials.
COSBOA is disappointed to see not enough consideration has been given to the real need improving cyber awareness and mitigating the risks for small businesses. In a recent survey of Reckon users 84% of respondents agreeing that more support was required to help small businesses digitise and combat cyber threats. The Government has yet to address this need for the small business community.
INFRASTRUCTURE
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The Government is delivering on its election commitments as part of the more than $120 billion pipeline of investment in transport infrastructure over the next 10 years.
COSBOA welcomes this investment but would like to see a Placed Based Approach to consulting with small business communities to ensure the impact of construction is minimised, the project enhances rather than is destructive to small business communities and the future economic development impact is considered at the project design phase.
MENTAL HEALTH SUPPORT & DEBT COUNSELLING
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Minster for Small Business Julie Collins announced ahead of the budget that the government will provide $10.9 million to the extension of the NewAccess for Small Business Owner Program, administrated by Beyond Blue which matches small business professionals with trained mental health staff and provides six sessions without the need for a GP referral or mental health plan. $4 million of new funding will go to the Small Business Debt Helpline, a free-to-use service offered by Financial Counselling Australia.
“In this ‘wellness’ budget, it is terrific to see an acknowledgement that our small business community has been doing it tough, and with the workforce shortages and rising inflation, there is seemingly a long way to go.
“We warmly welcome the funding of these programs and know they will be vital to support our small business operators going through hard times,” said Boyd.
Business Council of Australia
“Amid global economic turmoil this budget steadies the ship and sets the groundwork for reform to drive economic growth in the May budget,” Business Council chief executive Jennifer Westacott said.
“This is a cautious and careful budget that avoids making our inflation problem worse.
“This is a crucial first step to restoring our budget position and building our national resilience.
“We welcome investments to boost productivity and participation through skills, education, childcare and expanding Paid Parental Leave.
“We strongly support the government’s comprehensive skills package and migration announcement. These measures mean we can start to tackle our labour shortages while building the skills of the future which will be essential to attracting new industries and growing wages.
“We are pleased to see a substantial reduction in the forecast deficit this year but it is strong and successful businesses in key sectors that continue to do the heavy lifting of powering the economy.
“On top of this, the commodity price boom and low unemployment have delivered a better bottom line and the revenues needed to slow growth in debt.
“Our biggest challenge will come in the next three years, and we must do the hard work of reform to drive growth, productivity and restore the national credit card.
“We are facing a herculean set of challenges. The task ahead is enormous.
“Productivity growth over the last decade was the worst in six decades. This remains the biggest handbrake on wages growth.
“In two years, debt will exceed $1 trillion. Interest payments will be the fastest growing payment over the next decade outpacing Health, Education, Defence, the Aged Pension and NDIS.
“The pace of economic growth at 1.5 per cent next year is way below our potential and improves only to a meagre 2.5 per cent at the end of the forward estimates.
“It is now time to pull out all stops to drive productivity, innovation, dynamism and job creation. Key to this will be lifting investment off a 30-year low to drive economic growth.
“The budget does little to tackle this problem. We can’t wait for the May Budget to turn this around.
“Business is ready to work with government on the reform path needed to shield Australians from global uncertainty. As the budget shows, $127 billion in company tax receipts in one year alone will help close the fiscal gap.
“Our prosperity is by no means assured, so we’ll need to tread carefully to lock in growing and successful businesses that fund the services Australians want.
“The budget provides a fiscal reset and starkly demonstrates why the days of kicking reform down the road must end.
“After a decade of delaying hard decisions in almost every jurisdiction, we must finally put an end to the idea that governments and more government spending alone can solve our problems or that we’ll get lucky and they’ll solve themselves.
“It is only decisive and coordinated action across all levels of government that will position us for the future, drive growth and give Australians the best opportunities.
“The Budget highlights a fragile economic situation. Overreach in areas such as industrial relations which increases complexity, makes it harder to do business and lowers the incentives to invest and innovate will only make a fragile situation worse.’’
Childcare, Paid Parental Leave and participation
“The government is right to stay the course on its childcare measures, ensuring the sector is prepared for increased demand and that Australian families can access care," Westacott said.
“Moves to boost the duration of Paid Parental Leave are welcome steps to increase participation and let families choose what suits them.’’
Women’s Budget Statement
“It is pleasing to see a comprehensive Women’s Budget Statement and key initiatives which continue to tackle participation and advancement.
“We strongly welcome the record investment of $1.7 billion to tackle violence against women and children.
“As we said at the Jobs and Skills Summit, women’s economic security and participation is now a centrepiece of economic strategy, not a side issue.’’
Skills
“We strongly support the additional 180,000 fee free TAFE places which must be targeted to areas of skills shortage as part of a comprehensive rewrite of the National Skills Agreement.
“We welcome a national study into adult literacy, numeracy and literacy skills, barriers which are holding so many people back from participating in the workforce.
“We are pleased to see the Jobs and Skills Summit commitment of 195,000 migration places. This boost not only deals with addressing our short-term skills shortages but also ensures knowledge transfer, which drives innovation and new industry growth.’’
Fiscal strategy
“The budget outlines a sensible approach to funding the government’s promises but a lack of fiscal rules risks a slow drift to higher taxes and lower growth.
“We welcome the $28 billion savings which appear well-targeted and well thought through but we need a long-term strategy to control costs through better service delivery. ‘’
Integrity measures
“We welcome the commitment to tackling the shadow economy. We acknowledge the importance of multinational tax compliance but we would encourage the government to consult widely to avoid unintended consequences of deterring much needed foreign investment.
“We would welcome more clarity on the proposed alignment of the on-market and off-market share buybacks and the implications for institutional and retail investors.’’
Investment
“Business investment is still predicted to languish at lows not seen since the early-90s recession.
“It will be up to the May Budget to pull Australia’s investment out of the doldrums to drive new opportunities, new industries and supercharge our economic dynamism.
“It’s disappointing that this budget fails to include incentives to drive new investment and productivity, including the patent box.’’
Climate and energy
“We welcome the comprehensive expenditure on the transition to net zero and the decarbonisation of our economy.
“We particularly welcome the $1.4 billion investment in powering our regions, which must play a key and leading role in our transition to net zero. All steps need to be taken to ensure regional Australians are not disadvantaged in the decarbonisation of the economy.’’
Regions
“We welcome the $7.4 billion to support regional development. The Business Council has long advocated for a serious focus on regionalisation.’’
Housing
“We welcome measures to boost housing supply and support an approach that sees better federal-state cooperation.
“We strongly support the housing accord which should boost supply. It has to be matched with an overhaul of state-based planning systems which are holding back vital housing supply.’’