18 December 2024
Government should focus on the economic levers it can control to boost business productivity and company tax
- Mid-year economic update failed to connect the dots between Australia’s increasing deficit and the nation’s desperate lack of business productivity
- CPA Australia urges government to focus on the levers it can control to boost productivity and revenue – reduce regulation and encourage business growth
- Young Aussies should be encouraged to start their own business or purchase an existing one as part of efforts to improve the nation’s economy, productivity and dynamism
While Australia’s economic prosperity is undoubtedly influenced by the price of commodities and global markets, the government should be looking closer to home for solutions to the economic challenges identified in the Mid-Year Economic Fiscal Outlook, says CPA Australia.
“The government cites a reduction in company tax and unavoidable spending as the main reasons behind expected increase in deficits over the next four years, but with the right policies and incentives it has the power to boost business productivity and confidence to help make up the decline in revenue from companies,” says CPA Australia Chief of Policy, Standards and External Affairs, Elinor Kasapidis.
“The expected fall in company tax revenue is not helped by Australia’s ongoing productivity crisis. This is where the government must connect the dots and use the levers it has to influence an upturn in fortunes of the economy. This means cutting existing red tape, improving the design of new regulation, encouraging business growth with targeted incentives, and supporting businesses to incorporate new technologies to drive efficiency.
“The government should also be incentivising more young Aussies to follow their entrepreneurial instincts and create or buy businesses. As our annual Asia Pacific Small Business Survey routinely shows, small businesses in Australia trail in the adoption of new technologies compared with other markets in the region – partly because businesses in other countries are more likely to be owned by young people.
“Getting more young people into business – and nurturing their entrepreneurial spirit – will help boost our productivity crisis and can only be a good thing for the economy in the long-run.”
Ms Kasapidis says businesses are desperately searching for positive signs from the government to inspire greater investment in 2025.
“While business confidence is low, businesses still want to invest and grow where they can. They need a government that supports them and encourages growth and entrepreneurialism, rather than creating roadblocks,” says Ms Kasapidis.
“This means properly engaging with the business community and focusing on easing the regulatory and cost pressures that are holding investments back.
“Businesses are looking for effective and appropriate regulation which requires government investment in technology, federal and state law changes, and an ongoing commitment to good regulatory design in consultation with business.
“A concerted effort from government to implement growth incentives for businesses would not only be well-received, but could have a tangible impact on productivity and business performance.”
About us:
About CPA Australia
CPA Australia is Australia’s leading professional accounting body and one of the largest in the world. We have more than 173,000 members in over 100 countries and regions. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
Contact details:
Simon Downes, External Affairs Lead, simon.downes@cpaaustralia.com.au or 0401 461 503
