Federal Budget shores up Australia’s economic strength in an increasingly uncertain world

The Federal Budget 2022/23 illustrates our nation’s economic resilience, and helps Australian business continue to play its part in our economic repair job as the world continues to deal with the shocks of COVID-19 and geopolitical pressures. 

“The Budget focuses on improving our national security and supporting a more secure future for Australian households and businesses. Deregulation, tax measures, investments in skills, digitisation and cyber security will give our emerging industries further confidence to invest and grow,” said PwC Australia chief executive Tom Seymour. 

Cash flow support, red tape reductions, investment in skills and tax measures put business at the centre of Australia’s economic recovery

A suite of budgetary measures aimed at supporting millions of small and medium businesses and sole traders will support businesses to take risks, innovate, and support workers. 

“These investments and initiatives not only keep business at the heart of our recovery journey, but also recognises that compliance and regulatory hurdles need to be smart and fit-for-purpose. In our current economic climate, business confidence is our ticket to return to an economic growth agenda - and these measures will give the private sector the confidence it needs to continue investing,” said Seymour. 

Further reforms to employee share schemes will make it easier for Australian start-ups to compete for talent - and reward employees for their contributions to the success of their organisation.

“These reforms recognise not only that the war for talent has never been so fierce, but also that emerging Australian businesses have an enormous positive mark to make on our economy - and we need to give them every opportunity to succeed and compete globally,” said Seymour. 

Investing in infrastructure a key to our energy transition and our economic revival - but how it all gets built remains a problem to solve

Mr Seymour welcomed the additional investment in infrastructure, which includes a heavy focus on freight infrastructure. 

“Freight projects don’t always attract the same attention as other initiatives, but they are the lifeblood of the national economy. An efficient freight network for Australia means downward pressure on the costs of goods that all Australian businesses and consumers count on - and that ultimately means a more productive economy,” Seymour said.

“It is also pleasing to see the Government’s commitment to the next steps in the adoption of faster rail - for Sydney to Newcastle and Brisbane to the Gold Coast - enabling us to collectively rethink how our cities can grow sustainably,” said Seymour

“Our short-term challenge is the effective delivery of this larger infrastructure pipeline in light of the current shortage of relevant skilled workers. That’s why we welcome support for new apprentices in areas of skill shortage, and short-term visa changes to support sustained growth in a targeted and timely manner.”

Cost of living measures a necessary feature of the Budget - but true reform is needed to boost wages and living standards

Cost of living measures including the $420 extension of the Low and Middle Income Tax Offset and the six-month fuel excise reduction will play an important role in taking the edge off cost-of-living pressures in the next six months. 

“However, Australian households will need to be prepared for higher inflation and household costs to which they have become accustomed, particularly in light of the likely additional costs as interest rates start increasing,” said Seymour. 

According to Seymour, if real wages growth is objective, these temporary cost of living measures do not usurp the need to become more productive to grow wages. 

“This reinforces the need for better training, a shift to advanced manufacturing and skills reforms that truly drive productivity,” said Seymour. 

“While this support will make a meaningful difference for many Australians, the Government will be watching carefully to ensure it doesn’t put more pressure on inflation and have a counterproductive impact,” Seymour said. 

“Our economy has demonstrated remarkable signs of resilience, but in the years ahead, it’s essential Australia puts greater focus on the budget repair job by addressing lagging productivity, attracting more international investment on our shores and through wholesale tax reform.

“Major tax reform in Australia is inevitable and fundamentally necessary. Many if not most of the generational reforms the world has seen have been shaped and driven by landmark world events and crises. We must not waste the opportunity we have as a nation to reflect and take stock of how Australia can scale new heights,” said Seymour.