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Industry and business leaders warn government over future lockdowns

Australia’s top industry groups have warned the federal government that if the economy is to grow it must further enable businesses to take the lead in creating jobs and driving productivity gains.

Industry and business leaders warn government over future lockdowns
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  • Keeli Cambourne
  • December 17, 2021
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The call follows the release on Thursday (16 December) of the government’s Mid-Year Economic and Fiscal Outlook (MYEFO), which showed the Australian economy is positioned for strong growth in 2022. 

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said 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,” he said.

“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.

Mr McKellar said the flipside of record employment is that businesses will be facing an increasing lack of skilled workers, which will impede 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,” he said.

“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.

Chief executive of the Australian Industries Group Innes Willow said the MYEFO highlights some key vulnerabilities that should attract substantial policy proposals from across the political spectrum.

"The strength of the rebound was evident in the ABS Labour Force data which suggest the labour market recovery could be faster than anticipated in MYEFO. While positive, this will also add to businesses' concerns about skills shortages and the need to more rapidly return to pre-COVID levels of migration and particularly of skilled migration,” he said.

"Despite the interruptions associated with the Delta outbreak, the federal budget aggregates are not much changed from those in the May budget. While that is good news for the immediate outlook, considering that it could have been much worse, the persistence of large structural deficits remains of concern and reinforces the importance of policies to address well-entrenched flaws in our tax systems.

"Another area of fundamental concern is the expectation of continued low real wages growth. This highlights the importance of policies to encourage higher rates of productivity growth in areas such as skills development, innovation and the further recovery of business investment.”

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