The Budget missed an opportunity to appropriately boost business productivity, a critical tool in the inflation-busting toolkit. Reducing the cost of doing business is just as important as reducing the cost of living. The measures to support SMEs on issues like greater flexibility for the ATO to support small business navigate tax issues, increase to the instant asset write-off, small business energy incentive and relief fund, and digital tech uptake will be of assistance.
Business productivity a big miss
It was disappointing that business productivity was not a centrepiece. With the challenge of rising interest rates and high inflation, the govt has failed to provide big picture fiscal policy measures to tackle this head-on and instead opted for a potential inflation-building pathway.
It’s accepted across that business, including small business, is leaned on to spearhead economic recovery, but there have been minimal measures in the budget to boost business productivity. Master Builders previously called for measures to reduce unnecessary regulation and red tape on businesses to improve their capacity to deliver projects cost-effectively.
Our industry has moved backwards over recent years in terms of productivity performance. The budget has missed a chance to allow for more favourable outcomes when it comes to the cost, quality and quantity of building and construction output. The large economic footprint of the building and construction sector means that better productivity in our industry will flow to many corners of the whole economy and benefit the living standards for Aussies.
A cloud of uncertainty hangs over the next tranche of industrial relations legislation, and we urge govt to avoid productivity sapping changes that undermine the very fabric of small business: flexibility, entrepreneurship and choice. Builders are facing a shortage of key tradespeople whilst substantial industry transformation is underway for a net zero economy.
Around half a million new building and construction workers are required by the end of 2026. As the population is expected to grow, more support is required to attract, train and retain workers in the industry. Master Builders will work closely with govt on the implementation of the new Australian Skills Guarantee, apprenticeships support and National Skills Agreement.
The ailing housing sector limps on
The housing crisis remains a major issue and we have not seen enough to start increasing housing supply. The pain of higher interest rates and high inflation is real and if we don’t get it under control we could be in for a lengthy period of pain and depressed construction activity.
With rental inflation at record highs, rental relief will assist those who are doing it tough. But mum and dad investors and business are being left to absorb a lot of the economic shocks. The expansion of the first-home buyer guarantee and the regional first home buyer guarantee is good news for people finding it difficult to enter the housing market.
The additional $2 billion for more social and affordable housing through the National Housing Finance and Investment Corporation, a reduction in investment taxes for Build-to-Rent, and funding for household energy upgrades is welcome. The Housing Accord announced in the last budget articulated immediate actions for Commonwealth, state and territory govts.
The commitment to identify suitable Commonwealth land for delivering social and affordable housing and the extension of the Australian Skills Guarantee to include apprentices on the Federal Government-funded housing projects is yet to be seen. If we want shovels in the ground to meet the one million homes target from 2024, more action is needed now.
We hope the infrastructure review provides an opportunity for the Federal Government to continue community, city and regional-focused infrastructure funding programs through genuine partnerships across levels of government and with industry.
Denita Wawn is the Chief Executive Officer of Master Builders.
