The federal government is treading a narrow path to tackle short-term demands, but 2024-25 Federal Budget prompts more questions about taming inflation and the medium-term sustainability of spending.

“The projection of a surplus for the current financial year is a positive. However, over the next four years, there appears to be little prospect of substantial progress towards further budget repair,” ACCI chief executive officer Andrew McKellar said.

“Over this period additional spending means the budget deficit and net debt will both be higher than previously forecast.

“While the impact of the Budget on inflation is hard to assess, it would be difficult to accept the assertion that it materially reduces underlying cost or price pressures.

“Business is not asking for the size of the government to grow. This can only lead to higher costs and more taxes.”

Small business

“This year’s Federal Budget delivers slim pickings for small businesses,” Mr McKellar said.

“While ongoing energy bill relief is welcome, and the extension of instant asset write-off will help some businesses, there are limited measures to address the surging impact of red tape on small business.

“Incentives aimed at encouraging investments from businesses, especially small businesses, are crucial during a time of economic fragility.

“Small business owners are under significant pressure due to increasing regulatory complexity, rising business costs and worker shortages. Small business owners will find very little comfort or reassurance in this Budget.”

Skills and apprenticeships

“Business investment in training and the skills of their employees is a vital pathway to increased productivity. Many small and medium-sized businesses are keen to hire apprentices as a means of increasing their access to skills,” Mr McKellar said.

“The partial extension to support for the apprenticeship system over the next 12 months while a strategic review is completed provides some breathing space. However, it is unclear that this support will be sufficient to arrest the current downward trend in apprenticeship commencements.”

Future Made in Australia

“The much-anticipated A Future Made in Australia strategy provides a targeted but modest set of initiatives that focus on advancing the transformation to net zero emissions and other areas of business investment,” Mr McKellar said.

“A net additional investment of $22.7 billion in funding is, in context, not of a magnitude that will fuel further claims of a government picking winners. At the same time, this level of investment raises the question of whether A Future Made in Australia is the game-changer it purports to be.”

For more information:
Ashley Gardiner | Director, Media and Communications
P | 02 6270 8020
E | media@acci.com.au