Fiscal repair must be overriding priority of federal budget

Government must show expenditure restraint and commit to concrete structural fiscal repair, the nation’s largest business network has outlined today following the release of its 2023-24 pre-budget submission.

“The upcoming budget offers government a real opportunity to put Australia on the path to better economic health,” Australian Chamber of Commerce and Industry chief executive Andrew McKellar said.

“The overriding priority for the government in the May budget must be on reining in spending to sustainable levels rather than increasing taxes. This is vital to building business confidence, thereby unlocking private investment.

“While we have avoided the worst of the economic turbulence experienced abroad, there are clear challenges. Most immediately, coast-to-coast skill shortages, stubbornly high inflation, and rising costs are affecting business every day, while longer-term fiscal pressures risk holding us back if not addressed.

“This budget is an opportunity for the government to make lasting change for the good of the Australian economy overall, including tackling debt and lowering spending as a share of GDP.

“Rather than kick the reform can down the road, now is the time to put tax reform back on the agenda.

“With widespread skills and labour shortages continuing to hold back the economy, a comprehensive plan is needed to grow Australia’s workforce. Businesses are nothing without skilled staff.

“Lagging productivity can also be addressed by measures that drive investment, research, and development, and advance the use of technology, digital platforms, and cyber security.

“Government must be prepared to confront some tough decisions and the focus of new spending must be on growing capacity. A failure to do so would be terminal for the Australian economy and ultimately cost jobs,” Mr McKellar added.

Read ACCI’s pre-budget submission here.