by Ashley Gardiner | Jun 5, 2024 | Media Release
National accounts figures for the March quarter released today shows a feebly performing economy, reflecting the difficult conditions facing business according to the Australian Chamber of Commerce and Industry.
“The continuing shrinkage of GDP per capita is a clear indication that conditions are moving in the wrong direction,” ACCI chief of policy and advocacy David Alexander said.
“The figures only serve to highlight the need for significant economic reform to lift productivity in the economy.”
Data from the Australian Bureau of Statistics (ABS) shows the economy as a whole barely grew over the March quarter at 0.1 per cent, with a revised annual figure of just 1.1 per cent.
The deterioration of the economic situation continues to be masked by strong population growth.
GDP per capita went backwards by 0.4 per cent, the fifth consecutive quarter in which this measure has been in reverse.
Productivity levels continue to stagnate, with the national accounts showing GDP per hour worked declining from 0.5 percent growth to zero in the March quarter.
The national accounts show new business investment fell by 0.7 per cent this quarter.
Cost of doing business pressures are mounting, and businesses margins are being squeezed, with gross operating surplus of private corporations down 7.3 per cent in the year to 2024.
“Businesses need more confidence that policy settings are supportive of investment,” Mr Alexander said.
“More support is needed to drive business investment, which is essential to restoring productivity growth and reigniting the economy.
“The large-scale industrial relations changes enacted over the last two years are making the economy less flexible and productive, with the full effects to impact on business over coming months and years.”
by Ashley Gardiner | Jun 3, 2024 | Transcripts
Sky News NewsDay, Monday 3 June 2024
Topics: Annual Wage Review
E&OE
Kieran Gilbert: What’s your assessment of the wage decision today, is it reasonable?
Andrew McKellar: Look, 3.75 per cent, I think this tests the limit of what business would see as being a reasonable outcome. The good thing is it’s nowhere near the extreme position that the ACTU were arguing for, and I think that would’ve been a very bad outcome if we’d gone significantly above inflation, five per cent and more in some sectors. I think from an inflation point of view, broadly, this is neutral. It’s not really reducing the pressure on inflation for business. The real concern is particularly small business at the moment, they’re facing extreme cost pressures from increased regulation, red tape, wage pressures are still there, and if we don’t see productivity really picking up in the next few quarters, then I think that’s going to be a concern.
Kieran Gilbert: What’s the biggest worry right now for small business? Is it the interest rate pressures or falling demand from consumers? What’s the thing that you’re getting from your membership?
Andrew McKellar: There’s a range of things, and there’s no doubt that the confidence took a hit in the first quarter. Orders were weaker, so demand has come off. Interest rates have done their job. But the other thing that we’re picking up, and this is coming through very clearly from small businesses, they’re very concerned about the impact of red tape compliance that’s grown over the past year. It’s growing more, particularly with things like the industrial relations changes coming through in the coming months and coming quarters. Small businesses really struggling just to keep its head above water in terms of the amount of compliance that it’s having to do at the moment.
Kieran Gilbert: But this decision today by the Fair Work Commission, as you said, it tests the limit, but it won’t be putting business over the edge. Will it sort of increase?
Andrew McKellar: I think the one concern we’d have here is, is there a continuing delinking between wages, growth and productivity? We think that this is fine from the point of view of just looking at a neutral position in relation to inflation, but if we want to get real wages moving, we want to see that achieved sustainably. We’ve got to get productivity going.
Kieran Gilbert: I had Tony Burke on the program earlier, the workplace minister, and I asked him, I put some of the criticism from you and others that their IR changes are hurting the prospects for productivity. He rejects that notion. He says there are many other ways to drive productivity right now, and it shouldn’t have to be the lowest paid that have to suffer in order to drive productivity. What do you say to that?
Andrew McKellar: Unfortunately, the government’s industrial relations changes have been crushing and productivity. That’s the reality. And going forward, it will make it much harder for business, for small business to make the decision to employ people going forward. Whether that’s in casual employment, whether that’s independent contractors, whatever it is, that’s a significant additional compliance burden that business is struggling with at the moment. That’s on top of all the other factors. So I’d have to disagree with what Tony Burke said.
Kieran Gilbert: Why is it harder to put on workers moving forward for a small business? If you wanted to put on one or two workers, what are the changes that…?
Andrew McKellar: In terms of the definition of what is a casual employee, the fact that there is much greater uncertainty as to how that will be applied in the future. Of course, business has to adjust now to comply with a number of those changes that have been put through. That is adding to that amount of time that business has to take and the risk when they take somebody on that potentially if they get into a situation of dispute, that they’re going to be tied up with further cost of litigation as a result.
by Ashley Gardiner | Jun 3, 2024 | Media Release
The Australian Chamber of Commerce and Industry acknowledges today’s decision by the Fair Work Commission to raise the national minimum wage and modern award minimum wages by 3.75 per cent.
“This tests the acceptable limits for businesses. The outcome is slightly above current inflation and well over the Reserve Bank’s target range for inflation,” ACCI chief executive officer Andrew McKellar said.
“This decision is not in line with the trajectory needed to shore up the Australian economy, but it does not pose a significant inflation threat so long as productivity is addressed.
“Over the past year, productivity has been flat at best. For the outcome of 3.75 per cent to be justified, it is essential that there is renewed growth in productivity as an urgent priority. This must be central to bargaining at an enterprise level.
“This decision is further evidence of wages being de-linked from underlying productivity, which is not an economically prudent approach.”
The Fair Work Commission has ignored the extreme claims of the union movement.
“This decision is a repudiation of the irresponsible five per cent demand from the ACTU,” Mr McKellar said.
“Such an increase would have dangerously burdened the economy. It posed an unacceptable risk to inflation, and would have seen interest rates higher for longer.
“Bringing inflation under control is central to the economic well-being of all. So long as inflation remains elevated, the buying power of every dollar diminishes.
“Small businesses are grappling with significant increase costs as a result of the increased compliance burden and wages remain a concern in such an environment.
“It is inevitable that businesses will need to pass increased costs through to consumers. Many small businesses are in a position where they simply cannot absorb any more.
“Regulatory costs are going to increase further the impact of the governments industrial relations changes continue to flow through to the economy in such an environment business will need to pass on additional costs.”
by Ashley Gardiner | May 28, 2024 | Media Release
The call from Industry Minister Ed Husic for a new discussion about corporate tax rates is a welcome development, the Australian Chamber of Commerce and Industry said today.
“Australian businesses will embrace the need to reconsider corporate taxes. Lowering the corporate tax rate or introducing investment allowances are critical measures that can drive business investment, spur economic growth and ultimately benefit all Australians,” ACCI chief executive officer Andrew McKellar said.
“Businesses need the ability to free up capital and invest, especially given the sluggish productivity growth over much of the past decade.
Corporate tax reform or investment allowances would incentivise businesses to upgrade technology, enhance productivity and create jobs.
“Ensuring that businesses can invest in growth while also improving wages on the back of productivity gains and job security is the right approach.
“ACCI looks forward to engaging constructively with the government on this crucial issue and we thank the government for raising it. An approach that enhances productivity and ensures sustainable economic growth would be a win-win for all Australians.”
by Ashley Gardiner | May 15, 2024 | News, Transcripts
Event: ACCI chief executive Andrew McKellar and AMA president Professor Steve Robson interview with Natalie Barr and Matt Shirvington on Sunrise.
Topics: Budget 2024-25
E&OE
Natalie Barr: Australia’s health sector received a major boost in last night’s budget with new funding on the way for 29 urgent care clinics and extra financial support for student healthcare workers.
Matt Shirvington: On the business front, the government has also committed more than $560 million to support Australian innovation and industry. And one million small businesses will receive $325 in energy bill relief. To unpack, let’s bring in Andrew McKellar from the Australian Chamber of Commerce and Industry and President of the Australian Medical Association, Professor Steve Robson. Good morning to you. First to you Andrew. The Treasurer is confident his Budget won’t further fuel inflation and predicts inflation will fall to between two and three per cent by December, which is look a little bit earlier than the RBAs forecast. Right. So are you concerned that they’re going to get it right?
Andrew McKellar: Good morning, Shirvo. Good morning, Nat. Great to be with you. Look, I think we’re cautious about those forecasts. I think it’s great that the government has got a second budget surplus, so that shows that they’ve been responsible in the last 12 months. But if we look ahead over the next couple of years, then we see deficits reemerging. We see spending going up. And in that sort of context, it’s very difficult for that to take heat out of the economy, to keep inflation going lower. We’ll see what the Reserve Bank thinks, but it would be hard to imagine that this Budget would bring forward the date on which the Reserve Bank would start lowering interest rates.
Natalie Barr: Lots of opinions around this morning. People want to know how it’s going to help them. What about small businesses? Is there enough support for them?
Andrew McKellar: Small business is doing it extremely tough at the moment. They’ve been facing rising costs just as households have. There’s slim pickings in the budget for small business. So there are a couple of things that are welcome. Certainly the extension of energy bill relief, which will reach a number of small businesses projected about a million. That’s useful. There’s an extension of the instant asset write-off. Again, that’s just been legislated from last year. So I think if the government gets on and processes that quickly, then those are boosts for small business. But beyond that, we’re not seeing a whole lot.
Matt Shirvington: There needs to be more on that. Steve, let’s go to you. Healthcare, significant new funding on the way for aged care, public hospital, student healthcare workers. Some of that delayed though. Is that what you are hoping for?
Steve Robson: I think we had a sense of disappointment with the Budget last night, and a lot of patients, people want to know that they can get an appointment to see a GP, that they can afford that care, that all of the hundreds of thousands of Australians who are waiting for planned surgery around the country can have their operations done. And people with chronic problems like mental health will get support. And I don’t think we’ve seen a lot of funding going to any of those in the budget last night. These urgent care clinics, they’ll be a help. They look urgent care clinics are somewhat controversial. There’s not a lot of, they serve their purpose, which is keeping Australians out of emergency departments. We feel that the best way to keep Australians out of emergency departments is to make sure they can see a GP and get great care. So we’re a little disappointed with the announcements last night, but we’re hoping to keep working with the government as we move forward so that Australians can get the care they need, the operations they need as soon as they need them.
Matt Shirvington: Okay. Andrew, Steve, thanks for cutting through some of the detail for us.
