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‘Let’s grow our way out, not tax our way out’: Business reacts to economic slump

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
23 July 2020 2 minute readShare
Business reacts to economic slump

Following the Treasurer’s delivery of an eye-watering set of budget figures, the general consensus in the business community is that job creation should drive national recovery.

The business community agrees that Australia has quite literally, and rightly so, thrown everything at driving economic activity while controlling the health crisis presented by the pandemic, but the consensus is that the economic statement delivered by the Treasurer is profoundly shocking.

While an economic black hole was predicted, the figures delivered on Thursday have nevertheless sent shockwaves through the community, with many now wondering how Australia will emerge from this crisis.

Business Council chief executive Jennifer Westacott stressed the need for positive momentum, calling on the business community not to be paralysed by the economic statement.

She stressed that job creation must be prioritised through a regulatory overhaul that will ultimately simplify doing business in Australia.  

“We need to grow our way of this, not tax out way out,” Ms Westacott said.

She explained that every dollar of taxpayers’ money needs to be spent on saving a job or creating a new one.  

“Jobs are the key to the recovery,” Ms Westacott said.

“Doing business in Australia must be as easy as possible because only successful, growing businesses can invest, expand and create the 1.2 million jobs we need.”

She warned that the current freefall in business investment needs to be reversed to create jobs, and suggested a number of initiatives, from incentivising investments to encouraging shovel-ready projects.

“We need to give businesses the incentives to invest in new equipment, facilities and staff. We’ll also need to give Australians the right skills to find a job or adapt to a new one,” Ms Westacott said.

“We’ll need a workplace relations system to support our recovery and be flexible enough to keep and create jobs.

“We’ll need all governments to unleash their balance sheets and invest in shovel-ready projects that create jobs and give us the infrastructure the economy will need.”

Last but not least, she called on the spirit of co-operation developed in the national cabinet to be harnessed to deal with some of the most difficult reform challenges: tax and regulation.

“Business as usual won’t cut it. The best way to shore up the budget is to shore up the economy,” she said.

‘Stimulating the construction industry is a no-brainer’

Also addressing the economic forecast, Denita Wawn, CEO of Master Builders Australia, said she is worried about the impact of the forecast fall in demand on the viability of around 380,000 of small builder and tradie businesses.

Master Builders, she explained, wants to see more policy reform, subsidies and stimulus to reskill and upskill people. She also called for a fast-tracking of tax reform and measures to free up investment by institutional investors.

“We need to go to a new phase where government stimulus and subsidies remain and expand while fundamental policy to maximise private investment in facets of the economy gain pace,” Ms Wawn said.

She also called for greater flexibility and resilience-boosting measures.

“The construction sector works under very inflexible pattern industrial agreements and our members tell us they need flexibility to deal with the effects of the COVID crisis now, not when it’s too late,” she said.

“With over 630,000 small businesses with between zero and four employees currently on JobKeeper, measures to boost the resilience of small businesses are also vital.

“Our industry is 98 per cent comprised of SMEs and there are more small businesses in building and construction than any other industry. They need support to boost their online presence, get across digital ways of doing business and better managing their businesses to survive this crisis.”

Underlining that “a strong building and construction industry means a strong economy”, Ms Wawn expressed hope that private investment will be supplemented by the government in form of stimulus and subsidies in the October budget.

‘Let’s grow our way out, not tax our way out’: Business reacts to economic slump
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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