CCIWA Chief Economist
Today’s Federal Budget confirms the strength of the Australian economy with significant upward revisions to economic growth in coming years, which has in turn flowed through to a $20 billion improvement to the Budget bottom line.
CCIWA has also achieved a significant workforce reform as part of the Budget. In line with our recommendations, parents will be able to decide how to share 20 weeks of paid parental leave, enabling thousands of women to choose to return to work in a way that best suits them. This will ultimately boost workforce participation, benefiting local businesses.
Despite the improved set of books, gross and net debt will not peak within the Budget forward estimates. This, in combination with rising interest rates, means the cost burden to service this debt will continue to grow. While Australia still maintains a comparatively low rate of debt to GDP, our country must lean into some difficult choices when it comes to budget management in coming years.
The Budget also seeks to respond to significant forces threatening Australia’s recovery, facing down inflationary pressures, higher global fuel prices and rattled supply chains impacting cost of living. Reductions in fuel excise will provide welcome relief for households and small businesses. It also includes a number of additional and welcome measures, including direct support for businesses investing in digital initiatives, funding to incentivize the training of Australian workers, and increasing the skilled component of the permanent migration cap to 70 per cent.
The Budget rightly focuses on driving aspiration, economic resilience and innovation. In coming years, Australia will need to extend its effort to tackle tax and workplace relations reform. Businesses can count on CCIWA to be at the forefront of this conversation.