This year’s Federal Budget has the opportunity to set Australia up for sustained economic growth if it puts the fiscal strategy back on track, Business Council of Australia (BCA) Chief Executive Jennifer Westacott said. She said this Budget had to break the trend, particularly evident over recent years, where spending had grown faster than the economy.

The BCA’s submission to the 2014-15 Budget calls for a 10-year, 3-pillar strategy to repair the Budget and grow the economy, based on:

  • Correcting expenditure: concrete steps to reprioritise activities based on what is affordable and delivers value, reduce inefficiency in government spending, and measures that check unsustainable growth in major spending programs. This must be about structural change to current expenditure programs, the BCA said.
  • Strengthening the revenue base: starting a process of comprehensive tax reform with the goal of improving the efficiency and stability of the tax system so it raises sufficient revenue and is growth-focused.
  • Strong economic reform: with structural headwinds and demographic pressures starting to bite, the BCA argues that a 10-year growth reform agenda is needed to cut red tape, reorient workplace laws to make it easier to create and maintain jobs, push ahead with free trade deals, and increase participation by ensuring payments and family assistance support work, study and training.

The BCA also called on the Government to set a cap on tax as a proportion of GDP, promote stability and certainty for business by refraining from introducing any new changes to the business tax system, and use the tax white paper process to begin removing inefficient state taxes and improve the mix of indirect and direct taxation over time to better support economic growth.

Source: BCA media release, 24 February 2014

[LTN 37, 25/2/14]