“The upcoming Federal Budget represents an opportunity for the Government to set Australia up for a prosperous, sustainable future in an increasingly volatile and rapidly changing local and international environment,” Ai Group Chief Executive, Innes Willox, said in releasing the organization’s Budget submission.
The submission calls for a Federal Budget that will maintain the path to fiscal sustainability while providing personal income tax relief particularly for lower and middle-income households, underwriting further strong employment growth and making targeted investments in underlying drivers of domestic productivity and social inclusion. It also urges the Federal Government to maintain the current migration intake at 190,000.
Mr. Willox, said: “This Budget is an opportunity to tap into improvements in the revenue outlook to strengthen the budget position and to reinforce renewed business optimism to drive jobs growth and business investment. It is a means to advance our community and our economy.
“The Government should stay on course for the proposed phase-down in the corporate tax rate over the coming decade. This tax initiative should be the centerpiece of a program of far-reaching and comprehensive tax measures aimed at putting Australia’s tax arrangements on more solid foundations in line with the objectives of equity, sustainability and competitiveness.
“The focus of this year’s Budget should go beyond underwriting aggregate growth and performance. It must complement this with an emphasis on the promotion of social inclusiveness,” Mr. Willox said.
“This emphasis is reflected in the priority we recommend to be given to:
– Supporting further employment growth;
– Targeting personal income tax relief to lower and middle-income households; and
– Underpinning this with a fundamental emphasis on improving education and training outcomes.
Against this background, Ai Group’s key policy recommendations for the 2018-19 Budget include:
– Ai Group strongly supports the determination to return the Budget to a position of long-term sustainability.
– Ai Group supports the enactment of the remaining provisions of the Government’s Enterprise Tax Plan which would see a company tax rate of 25 per cent phased in over the coming decade. This should be accompanied by a program of broader tax reform measures.
– A good proportion of savings from greater program efficiency and any general bottom line improvements should be directed to more quickly achieving a sustainable budget position.
– Ai Group also supports personal income tax reform targeted to lower and middle-income households and making targeted investments in the underlying drivers of productivity.
Skills, education and training policy:
– Fund a national industry skills development and training support program focusing on digital skills, organizational change, workplace innovation and management development.
– The Commonwealth and COAG should address declining investment in VET and increasingly uneven investment across jurisdictions, by considering a nationally funded and nationally operated tertiary education system.
– Commit further resources to the incorporation of higher order skills development within VET qualifications.
– Implement measures to achieve full national consistency for all apprenticeships across Australia.
– In consultation with industry, develop measures designed to increase the level of participation in apprenticeships/traineeships.
– Facilitate direct industry and employer engagement through the Skilling Australians Fund.
– Develop and effectively resource a national STEM skills strategy in conjunction with industry to expand the STEM-qualified workforce.
– A national foundation skills strategy needs to be provided with a sufficient budget to support workforce literacy and numeracy programs.
Innovation and digital capabilities:
– Control the costs of the R&D Tax Incentive by adopting a cap on the refundable element.
– The Australian Government, NBN Co and industry should work together to describe and communicate business approaches to making the most of broadband.
– Businesses need to look for opportunities to invest in and maximize the use and benefit of the IoT (Internet of Things) and related digital technologies.
– Government initiatives (such as the Entrepreneurs’ Programme and Industry Growth Centres) could be avenues of support to help businesses better understand the longer-term benefits of digitally upskilling staff.
– Businesses could benefit from Government and industry support in increasing their cyber security skills and capabilities.
– Resource Austrade appropriately so it has the skills and resources to support Australian companies to access global value chains and to invest abroad.
– Progressively increase the budget allocation for Export Market Development Grants (EMDG) by at least USD 12.4 million per year over the next three years to USD 175 million.
Defense industry capabilities:
– Maintain the funding path as set out in the previous budget, with an underlying commitment to grow to two per cent of GDP by 2020-21, including USD 150 billion over the forward estimates.
– Implement supporting industry policies, including the Defense Export Strategy, the Defense Industry Capability Plan and the Skilling and STEM strategy.
– Establish an Energy Capability Unit to help industry better manage in the new high-cost energy environment.
– Establish an Energy Transition Fund with USD 200 million for grants to improve industrial energy management capability and implement opportunities.
– Allocate additional funds to the Emissions Reduction Fund to ensure continuity.
– The annual permanent migration planning level should be maintained at the current cap of 190,000; and
– Stronger priority should be given to the skilled migration stream within the permanent migration program and especially to the demand-driven components of skilled migration.