Cost-of-living measures and modest support for business were the hallmarks of the 2025-26 federal budget, which highlighted some sobering insights for the nation’s finances ahead of the federal election.
The budget forecasts a deficit of $42.1 billion for the coming financial year, and gross debt will now surpass $1 trillion for the first time next financial year.
CCIWA Chief Economist, Aaron Morey, said the budget bottom line is clearly showing signs of stress.
“The underlying cash balance weakened by $66.7 billion over the forward estimates, which was driven by softening revenue growth and an increase in spending commitments,” he said.
“At the same time debt is growing and becoming more expensive to service, although the nation’s debt levels still remain manageable.
“The best way to navigate out of fiscal challenges is through economic growth. That means the conditions must be right to grow productivity and encourage investment.”
Mr Morey said it was vital the government took action to turn around the nation’s flagging productivity and ensured the conditions were right to encourage investment.
“Australia needs an industrial relations system that is flexible and modern, we need an approvals system that doesn’t leave major projects in limbo for years, and we need to send a message to the world that we are open for business,” he said.
“Ultimately, it’s Australian businesses who will drive the growth that can turn around our economic fortunes, and no state contributes more to this that WA by virtue of our economy-shaping resources sector.”
Mr Morey said the announcement moves to curtail the use of non-compete clauses would alarm many Australian businesses.
“This measure will make it harder for businesses to protect their legitimate interests by ensuring workers do not unfairly use insider knowledge to help a new employer,” he said.
CCIWA welcomed the decision to introduce a national licensing scheme for electricians, which would make it easier for WA to lure qualified tradies from the East Coast.
The doubling of incentives for apprentices in the housing and construction trades, from $5,000 to $10,000, would help to tackle the skills shortages that have contributed to Australia’s housing crisis.
“This highlights the need to ensure that industry is also supported with strong incentives to take on apprentices in areas of critical need for our economy,” Mr Morey said.
Around a million small businesses would welcome the $150 electricity bill rebate, which is also being extended to every Australian household.
“This will deliver some much-needed relief for businesses and households, and it’s unlikely to have detrimental effect on inflation,” Mr Morey said.
“Utilities costs are a key pressure point for small and family businesses, so while this is a relatively modest measure, it’s good to see the Federal Government recognise these cost pressures by continuing to offer rebates.”
CCIWA welcomed the $20 million spend on the “Buy Australia” plan, to help boost local manufacturing in the face of tariffs introduced by US President, Donald Trump.
“The budget papers noted the risks posed by US tariffs could weigh on global growth and drive higher import prices, higher inflation and slower growth,” Mr Morey said.
“It was also encouraging to see some modest funding to boost Australia’s trade diversification agenda, with $16 million going towards an Australia-India Trade and Investment Accelerator Fund.”
Disappointingly, the instant asset write-off scheme will not be extended, meaning the current threshold of $20,000 will drop to $1,000.
The budget also includes reforms to the alcohol excise to help ease cost pressures on local breweries and distillers.
