Alexa Gioffre, Author at Australian Chamber of Commerce and Industry

Time for Senate to deliver promised technology boost

by Alexa Gioffre | May 10, 2023 | Media Release, News

A plan to extend an incentive for small businesses to invest in new digital technology has been welcomed by Australia’s largest representative of small businesses, the Australian Chamber of Commerce and Industry.

“This promised tax incentive is essential to assist small businesses in their digital transformation, with many falling behind in the digitisation amid a slew of other pressures,” ACCI chief executive Andrew McKellar said.

Provisions for the deduction are contained in the Treasury Laws Amendment Bill 4, which has been before the Senate since December last year.

“Unfortunately, this incentive is languishing in parliament despite being first promised in March 2022, and without action, it will expire at the end of June. The delay in passing this legislation has resulted in businesses owners missing out on being able to utilise the deduction,” Mr McKellar said.

Senator David Pocock has introduced an amendment that would extend the incentive, in a reduced scope until June 2024.

Under this proposal, the additional 20 per cent deduction to the cost of technology assets would be available to small businesses with an annual turnover of less than $10 million. The total bonus deduction a business could claim would be capped at $20,000.

“This incentive will help assist small businesses to adopt and upgrade new digital technologies and be more efficient, which means they can serve customers better, be more competitive and build their resilience to changing economic conditions,” Mr McKellar said.

“ACCI urges the parliament to support Senator Pocock’s amendment, which would assist around 2.4 million small businesses around Australia to bring their digital capability up to date.

“This is good policy to boost productivity – the reality is that businesses that invest in digital capability are more productive businesses.

“Small businesses are counting on what’s already been promised, the Senator’s amendment will extend this for an additional 12 months. It’s time for the Senate to make sure this happens.”

For more information:
Jack Quail | Media adviser
P | 02 6270 8020
E | media@acci.com.au

Tourist tax hike will slow return of visitors

by Alexa Gioffre | May 10, 2023 | Media Release, News

Australia’s peak body for tourism organisations expresses disappointment with the government’s decision to increase the passenger movement charge by $10 in the federal budget.

“This increase is a short-sighted move that will slow down the return of international tourism arrivals, which is ultimately harmful to the Australian economy,” Australian Chamber – Tourism chair John Hart said.

“The country’s price competitiveness is already low, ranking 116 out of 117 economies, due to imposts such as the passenger movement charge, making Australia the most expensive in the world in terms of passenger taxes.

“Australian Chamber – Tourism is calling for a freeze on any further increases in the passenger movement charge for the next five years, and for the revenue collected from the charge to be allocated towards covering the costs of moving passengers in and out of the country.

“The benefits of this collection should be directed towards improving the passenger experience, which will increase the likelihood of return visitation and benefit tourism as a whole.”

Australian Chamber – Tourism is pleased to see that Tourism Australia was able to retain a substantial budget in a tight financial environment.

“This is crucial in a time when every country is vying for high-yield visitors, and Tourism Australia needs to be properly resourced to support these efforts,” Mr Hart said.

“Additionally, a commitment to the Business Events Bid Fund is essential to support events that attract international visitors, as they are high-spending visitors that contribute significantly to the visitor economy.

“International visitors are the lifeblood of Australian tourism, and it is the high-yield leisure visitors that will provide the greatest benefit to the national economy in the long term. By supporting tourism, Australia can become a leading destination again and a significant contributor to the country’s economic success.”

For more information:
Jack Quail | Media adviser
P | 02 6270 8020
E | media@acci.com.au

Business welcomes restraint but impending fiscal cliff demands decisive reform

by Alexa Gioffre | May 9, 2023 | Media Release, News

The Albanese government has produced a credible budget however the extent of the challenges to bring Australia back to a sustainable fiscal path should not be underestimated.

“This budget harvests a slice of good fortune and makes some tangible steps in restoring the nation’s balance sheet, but the fate of our economy hangs in the balance,” ACCI chief executive Andrew McKellar said.

“Fiscal restraint, which has delivered the first surplus in 15 years, should be acknowledged in the face of the most severe inflation breakout in decades.

“However, with the prospect of returning to a structural deficit of more than $35 billion in two years, we cannot rely on record commodity windfalls, strong migration inflows and an ultra-tight labour market to drive down debt.

“Going forward, business is looking to engage strongly with government on building an ambitious agenda for further fiscal repair, developing sharpened incentives to encourage new productive capacity, and planning to drive the economic growth needed to underwrite future investment.

“This means getting serious about cutting spending relative to its current trajectory, and implementing productivity-enhancing reforms that don’t rely on higher taxes or embed inflationary pressures. Our future depends on it.

“To ensure a thriving economy that benefits all Australians, we must demand nothing short of disciplined fiscal policy and a growth agenda that relies on productivity gains.

Addressing energy shortfalls

“This budget has provided welcome breathing space for households and small businesses in the form of energy relief. With more than one million businesses eligible for rebates of up to $650, this will take the sting out of soaring power bills.

“A new tax break – the Small Business Energy Incentive – will assist main street firms to invest in electrification and other efficiency upgrades. Here, small businesses can be more competitive and more productive, while making meaningful progress towards reducing their carbon footprint.

“Ultimately, to keep up with growing energy demands, there remains an urgent need to accelerate investment in renewable energy generation, as well as firming and transmission capacity. This cannot be achieved by price caps and rebates alone – all options need to be on the table.

Remedying anaemic investment for small business

“With business investment in a free fall for more than a generation, a 12-month extension of the instant asset write-off for small business is welcome. This will provide renewed confidence amid souring economic conditions.

“Unlocking these much-needed funds can help kickstart capital investment as rising interest rates, soaring energy costs and a cooling Australian economy batter small and family firms.

“However, much more must be done. ACCI will continue to advocate for a long-term agenda that expands incentives for all businesses to encourage them to invest, to capture new markets, and to realise their entrepreneurial aspirations.

Enhancing women’s workforce participation

“The budget provides important strategic incentives to further encourage stronger women’s workforce participation, particularly through expanded access to paid parental leave – economic reforms that will promote greater opportunity and gender equality.

“A further $72.4 million investment will assist training and retention measures in the childcare sector which is urgently seeking additional staff.

“Combined with changes to deliver more affordable childcare, these reforms are crucial in encouraging women to fully participate in the workforce, helping to relieve chronic workforce shortages and boosting economic growth.

Relieving chronic staffing shortages

“Business welcomes progress of a new National Skills Agreement that works to deliver a real increase in VET funding. Ensuring its completion by the end of this year remains a vital priority for industry.

“Business will be looking closely at the redesign of apprenticeship support frameworks, noting that access to skilled staff is a critical concern for many small businesses. It is essential that the sector is closely consulted in any new arrangements.

“Australia must maintain an ambitious migration program. Yet, the projected bounce back in net-overseas migration still falls short of pre-pandemic forecasts. Recommendations of the recent Migration Review provided a constructive basis to overcome longstanding failures in Australia’s approach to temporary skilled migration.”

For more information:
Jack Quail | Media adviser
P | 02 6270 8020
E | media@acci.com.au

Andrew McKellar interview with Greg Jennett, ABC News Afternoon Briefing

by Alexa Gioffre | May 8, 2023 | Transcripts

Event: Andrew McKellar interview with Greg Jennett, ABC News Afternoon Briefing.
Speakers: Andrew McKellar, chief executive Australian Chamber of Commerce and Industry; Greg Jennett, host ABC News Afternoon Briefing.
Date: 8 May 2023
Topics: Federal budget 2023-24; energy price relief; inflation; interest rates; petroleum resource rent tax; budget repair; passenger movement charge; labour and skills shortages; Migration Review.

E&OE

Greg Jennett, host ABC News Afternoon Briefing: Well, outside of energy bill relief, it’s not apparent that there’s any large scale handout in store directly for business. Nor have the main big business lobby groups actually been asking for much either – they’ve read the signals from the Reserve Bank on inflation. Andrew McKellar is chief executive of the Chamber of Commerce and Industry and he’s explained why they’ve chosen a more restrained approach this year. Andrew McKellar, it’s budget eve, so you are back with us once again. Welcome to Afternoon Briefing, as always. Energy price relief, we’re told will be a centrepiece of the budget for households and for business. Is it clear to you how all this money, it could be about $3 billion state and federal, can be delivered in a way that is not inflationary.

Andrew McKellar, chief executive Australian Chamber of Commerce and Industry: Hi, Greg. Great to be with you. Look, any form of relief on energy prices for households and for small businesses particularly, it’s going to be welcome, that’s the first thing. How it will be delivered, I think here, one of the important things is it needs to be delivered in a way which doesn’t cut against what the Reserve Bank is doing with interest rates. So, if it’s adding back into demand, if it’s holding demand up for longer, if it’s adding to those inflationary pressures, then the risk is that we have fiscal policy pushing in one direction and monetary policy going the other way. We don’t want to see an outcome where there’s likely to be a reaction from the Reserve Bank to push interest rates higher again. That would obviously be very counterproductive.

Greg: And there are live risks here out there, on the demand side, not only just in demand for power, I suppose, but there are also schemes that create deductions for small business to go and invest in new kit or to better insulate their buildings for instance. That is all generating demand, isn’t it?

Andrew: Well, those things are very important, and the reason for that is at the moment, one of the biggest constraints the economy is facing is really on the supply side. So, I think anything here which focuses on adding to that supply, undertaking more investment, encouraging business to be more efficient, adding to productivity, then I think that is going to be consistent with the objective of keeping inflationary pressures in the economy lower. So, I think those sorts of things are very positive and constructive, and we would support them.

Greg: More broadly, because the word surplus keeps coming up, it’s very much in our expectations for the current financial year. Do you think the temptation to spend some of that does in fact do what you said shouldn’t happen? That fiscal policy might be pulling against monetary policy by the Reserve Bank?

Andrew: Well, again, I think here the government is going to have to get the balance right. So, it’s a wonderful thing if we are to go into surplus, and a lot of that is driven by windfall revenues that have come about as a result of much higher commodity prices. That’s great. What we’ve got to ensure is that as much as possible of that extra windfall is turned back into paying down debt. The projection over the life of the forward estimates is over $100 billion worth of interest payments are there. It’s moving up from about $20 billion a year. That’s a huge cost to the expense of other programs. We’ve got to reduce that if possible.

Greg: And that will be a wafer thin surplus anyway by all accounts.

Andrew: Absolutely.

Greg: Business appears to, on what we know already, be spared any large nasties. In view of the fact that this is a Labor government, do you think that would be a relatively painless outcome for business if it’s not going to be hit with new taxes?

Andrew: In advocating in front of this budget, we, amongst other business groups, I think have been very careful. We’re not saying that we want particular special programs. Our emphasis has been on recognising that the government needs to get the budget back into order. It needs to undertake that process over the medium term of budget repair. We’re supportive of that process. We say there’s a lot they can do on the expenditure side to achieve that discipline. We certainly don’t want to see new taxes or significantly increased taxes coming in as part of that strategy. If they can achieve that balance, then business will be very positive, will be very supportive.

Greg: There might be some things at the margins though. For instance, in the tourism sector, I think everyone’s on high alert for an increase in the departure tax, so-called, or passenger movement charge is its technical name. Is that fair enough in view of the large number of overseas trips that Australians are now taking after the pandemic?

Andrew: We are cautious about that as well. I mean, if there’s one sector that’s been absolutely pummelled in the past several years through the pandemic and through other economic circumstances, it’s been the tourism and the hospitality industry. So, I think we would be very cautious about any increase in that charge. The other thing here is this is not a general revenue charge. Any increase in the revenue should be fed back into the purposes that it’s intended for. It really should be about supporting more effective borders, the movement of people across those borders, and in particular, the industries that are linked to that, the tourism and hospitality industries.

Greg: Well, it could actually become an incentive for people to holiday at home, domestically, couldn’t it?

Andrew: Look, I think at the margins, Australia obviously needs to remain competitive. There needs to be a clear justification between what that charge is for and where that money’s been spent. And I think at the end of the day, that’s the test.

Greg: All right. At the other end, really big business and big investments, the petroleum resource rent tax for offshore gas primarily is going up. I don’t think that really speaks to your membership necessarily, but do you welcome that?

Andrew: Look, we’re cautious about it. So here, there’s been some consultations with the industry, with the major gas producers. I think in the main, this represents a pull forward to some degree of the revenues that might have been further down the track. That said, it’s essential in this space that what we’ve got to be encouraging is exploration and production of gas in Australia. It’s very clear we have a critical situation with energy supply at the moment. Gas is an important part of the solution to that for the foreseeable future. We’ve got to maintain and attract those major investment projects to keep that part of the energy equation going. It’s vitally important to business.

Greg: And just finally, Andrew McKellar, population growth can’t continue at the rate that it’s been running at in recent years. Do you accept that? And what implications are there on the skills and labour side for that?

Andrew: Well, I think here we’ve just seen the government produce a major migration review. It was a very constructive review, and one of the most important things coming out of that we hope we will be that the temporary skilled migration intake will be better focused in the future. If that means that we can be more effective about attracting and retaining people to fill critical skill shortages, then that will be a better result. So, we’re encouraged by that, and I think businesses are looking forward to working with government to get those outcomes in place.

Greg: Plenty to look out for come tomorrow night. No doubt we’ll get a readout from you before too long. Andrew McKellar, thanks again for joining us.

Andrew: Perfect. Thank you.

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