Economic surge cannot be derailed by Omicron overreaction

The Mid-Year Economic and Fiscal Outlook (MYEFO) announced today shows that the Australian economy is positioned for strong growth in 2022.  However, if these benefits are to be realised, the Government must further enable business to lead an accelerated recovery, creating jobs and driving productivity gains.

“Today’s MYEFO update has far exceeded expectations for Australia’s economic rebound, however these improvements could still be derailed if governments choose to overreact in the face of the Omicron variant,” ACCI chief executive Andrew McKellar said.

“With the economic comeback from the pandemic gathering momentum, businesses and the community cannot afford a return to the disparate stop-start measures of lockdowns and restrictions.  It’s critical that governments shift the focus away from case numbers to how those cases are managed in the health system.

“A growing and vibrant business sector will be critical to ensuring our recovery.  Government must act as an enabler to ensure that businesses can spearhead Australia’s economic recovery, encouraging investment and aspiration while expanding our nation’s workforce.

“With unemployment levels falling to 4.6 per cent today, the concern is increasingly with skills and labour shortages, which are impeding a full return to productive capacity.

“The announcement that jobs growth is set to surge by one million over the next four years, means businesses will need access to skilled workers.  Increasing investment to skill Australians and grow our workforce will be essential to meeting future jobs demand.  Businesses are nothing without skilled staff.

“In 2022 we need to continue to open up our international borders in a safe and controlled manner to accelerate the economic recovery.  To prosper, Australian businesses need to have access to skilled migrants, international students and working holiday makers to resolve unmet labour demand.

“If stronger wages growth is to be realised, it is vital that these gains come from increased productivity and economic growth rather than supply-side constraints.

“To achieve sustained business investment to support the recovery, the extension of the Full Expensing measures is essential.  Over the past decade, business investment has collapsed, contributing to Australia’s very low productivity growth over this period.  We cannot afford to continue with this trajectory.