Australia’s Business Council has called for increased tax incentives to stimulate investment amid growing global uncertainty and a decline in productivity. In its submission to the federal government ahead of the 2025 budget, the Council recommended introducing a 20% investment allowance for all businesses to encourage economic growth and bolster the private sector.
The peak business body argues that such an initiative would help drive a recovery led by private-sector investments, providing a much-needed boost to Australia’s economy. The submission highlights the increasing challenges posed by geopolitical instability, particularly in the wake of threats from US President Donald Trump regarding tariffs.
Bran Black, the Business Council’s chief executive, emphasized that geopolitical tensions underscored the urgency of fostering a robust domestic economy. “We need to unleash the private sector because it’s ultimately businesses that generate economic growth and prosperity, which raises the living standards of every Australian,” Black said. “At a time of significant geopolitical uncertainty, we should focus on the things within our control—establishing the most competitive regulatory and investment environment possible.”
In addition to the proposed investment allowance, the Business Council’s submission to the government calls for a cap on public spending growth, suggesting a limit of 2% per year. The group also advocates for further deregulation and the reduction of bureaucratic hurdles that it claims hinder business growth.
“The need for a new pro-business approach has been sharply clarified by the new US administration,” Black added. “President Trump’s policies, including company tax cuts and deregulation programs, are intended to lift US competitiveness. Australia must adopt similar strategies to remain competitive in this rapidly changing global economy.”
The submission was made ahead of the federal budget, which is set to be presented on March 25, 2025. However, there are uncertainties surrounding the budget’s timing, as Prime Minister Anthony Albanese may call an election before that date. The election must be held by May 17, 2025, at the latest.
In its submission, the Business Council also advocates for reforms to workplace laws, calling for greater flexibility for employers in hiring and growing their businesses. “We’ve shifted the pendulum too far against employers, making it less attractive to hire,” the submission argued. It stressed the need to reverse recent changes, such as compulsory multi-employer bargaining, that it believes have hindered business expansion.
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