Industry leaders share reactions to the federal budget.
‘More support and recognition for the tech sector is required’
Chris Vein, CEO Australian Computer Society
“ACS acknowledges the challenges facing the Federal government with the 2023 Budget and its focus on social programs to make Australia one of the best places in the world to live. While we welcome the spending allocated to growing the nation’s critical technology industries, we urge the government to consider the sector’s strategic importance to Australia’s economy.
“With nearly a million Australians working in technology roles by the end of the year, more support and recognition for the sector is required. We will continue to work with the government to raise the importance of boosting the nation’s digital skills and capabilities.”
‘SMEs urgently need cyber security help’
Elliot Dellys, CEO of Phronesis Security
“While we welcome the Government’s renewed focus on cyber security uplift, many big-ticket items must be addressed. Small businesses urgently need cyber security help. Large firms and Government budgets alike have focused heavily on Government and critical infrastructure, while the SMB market has largely gone under-served.
“Support to SMBs can both help prevent future breaches and enable growth, as the clients of SMBs impose more stringent cyber requirements on their partners and vendors following a string of high-profile third-party breaches. Additionally, the Government must prioritise providing direct support to new cyber security start-ups to fuel local innovation and nurture the development of sovereign capabilities.
“The current market is highly competitive, and due to the sensitivity of the work, it can be difficult for new businesses to get a foothold. Many clients also offer little room to move on contracts, with payment terms that can kill cash flow for a small business.
“Further, significant insurance coverage is mandatory for most customers, especially due to the liability risks when conducting technical services, which can cost tens of thousands to get the business off the ground. Lastly, there is a major cyber skills shortage in Australia, with the shortfall of qualified professionals forecast to hit 30,000 over the next three years. Cyber certifications are in hot demand, but training can often require major expenditure for businesses and those looking to enter the industry.
“Most of the prerequisite qualifications for key industry roles are very expensive and typically provided by foreign suppliers. Investing in local training and education will not only help address the skills shortage and support local business but also help build sovereign national resilience.”
‘Delivers cost of living relief for vulnerable Australians and SMEs’
ARA CEO Paul Zahra
“We commend the government’s relief measures in these challenging times, which focus on protecting our most vulnerable people and businesses. Australians are rightfully keeping a close eye on cost-of-living reprieve, but so too are retailers – with discretionary spending beginning to significantly soften in the wake of inflation and consecutive interest rate rises,” Mr Zahra said.
“If a small business is the backbone of Australia’s economy, the retail community is the beating heart. Alleviating cost-of-living pressures is a vital component of economic stimulation.
“We commend the government on some smart and timely measures for small business. These include the continuation of the $20,000 instant asset write-off, energy bill relief and the new Small Business Energy Incentive to encourage investments in energy efficiency and electrification, to reduce costs and emissions in the long-term,” Mr Zahra said.
“The Small Business Energy Incentive will have positive impacts for retailers and the environment and was advocated for by the ARA pre-budget. However, we’re ultimately experiencing a crisis in the cost of doing business, and small businesses are bearing the brunt of this.
“Energy costs are just one of the higher inputs costs that businesses currently manage. Businesses need more support managing higher labour, leasing and supply chain costs, and insurance.
“The ARA also welcomed the Government’s establishment of the Industry Growth Program to support Australian SMEs and startups to commercialise their ideas and grow their operations.
“Retail is one of our most dynamic environments, so this will help put some exciting new ventures on the map. We’re also optimistic about the potential for existing small businesses to share in this funding.
Mr Zahra said the retail community welcomed the reforms flagged to streamline and simplify Australia’s migration system to offer long-term pathways to residency for skilled workers. He said the proposed migration overhaul would help address labour and skills shortages across the sector.
“The red tape of Australia’s migration system and the barrier of expensive childcare are two leading drivers of high job vacancies. We are pleased to see the commitment to cut the cost of childcare for 1.2 million families – together, these measures will have enormous benefits for retail and the broader economy.”
‘A modest budget misses the mark’
Innes Willox, Chief Executive of the national employer association, Ai Group
“While fiscally prudent, this year’s Federal Budget, unfortunately, lacks the urgency and imagination required to power the Australian economy through a period of anaemic growth,
“It offers little to kickstart the structural reforms needed to boost productivity, investment, innovation, job creation and sustainable real incomes growth,” Mr Willox said.
“The Government has used its one-off surplus, driven by elevated commodity prices, the strong labour market and fiscal drag, to pay off debt and reduce future interest payments. It has prioritised household-based subsidies and handouts rather than focusing on productivity improvements to lift the economy out of its long-term productivity malaise.
“While they have been designed to lessen the direct inflationary impact, these Band-Aids and sugar hits also fail to address the underlying causes of the problems they are trying to solve around housing shortages and underlying energy costs.
“The announcements around improving Australia’s skills base are the major positive, including the prospect of $3.7 billion in additional funding for vocational education and training, assuming a National Skills Agreement can be struck. This will be essential to building a TAFE system fit to meet the demand for additional TAFE places the Government hopes to create. The focus on increasing the basic language, literacy and numeracy skills that Australian industry reports are holding them back is also welcome.
“The focus on skilled migration remaining core of our national migration program of 190,000 migration places is also welcome as the industry seeks to fill growing skills gaps across our economy.
“Among the disappointments for business is the lack of focus on improving productivity, as well as relative lack of attention given to the needs of business itself. The Government’s much-touted $15 billion National Reconstruction Fund receives seed funding of only $550 million this year, almost stalling it at the starting line. This represents 3.6 per cent of the promised total NRF funding.
“A new Industry Growth Program is a cut-down, half-funded, government-run version of the existing Entrepreneurs’ Program, which has provided support for smaller businesses to plan for growth and expansion strategically. Government-run programs providing direct support for businesses rarely achieve their objectives.
“A significant cut of $61 million to the Export Market Development Grant scheme is deeply unfortunate given that successful smaller Australian businesses are increasingly seeking new export markets to drive their expansion and growth. A $150 million increased take from the bio-security levy on businesses trading in agricultural, fisheries or forestry products is another hit, especially for food processing industries.
“At a macro-level, there is a welcome improvement in the gross debt and interest repayment position and improved revenue projections which provides the Government with more headroom in future budgets. The Government assumes a further compression of wages, meaning there will be less incentive for workers to develop their skills over time.
“The Budget includes a lot of measures with insufficient explanation or detail. Among these are what the Government intends to do with $2 billion it has allocated in the future to ‘buying hydrogen contracts’ and the $75 million it has allocated for a National Artificial Intelligence Centre and associated programs.
“Overall, the Budget does not seek to cure the fundamental problems that Australian businesses and the economy face. While it reduces debt, the focus on short-term household relief will not provide the productivity growth we need now and the jobs we need for the future,” Mr Willox said.
‘Budget will boost the super savings of millions’
Bernie Dean, Industry Super Australia Chief Executive
Moving super payments to align with wages could give millions of Australians $50,000 more at retirement and drastically curb Australia’s unpaid super scourge which has cost workers $33 billion over seven years.
The federal government should be commended for announcing in this Budget that super should be paid on payday and not at least once a quarter, a policy change that will get more workers all the super they have earned.
“This Budget delivers a big win for the three million mostly young and lower-paid Australians unfairly deprived of the super they’ve earned and will give them a better shot at building a good nest egg for retirement.”
“The government should be commended for listening and then taking the necessary steps to end the huge super rip off which was undermining the future economic security of too many young women and others on lower incomes.”
“Aligning payment of super and wages is the right thing to do by workers, boosts government revenue, lifts investment returns and puts all employers on a level playing field.”
“Payday super gets many younger women what they are owed, but more needs to be done and bridging the gender super gap starts with paying super on parental leave.”
‘Takes key steps forward, but systemic reforms needed to accelerate progress’
Andrew Hudson, CEO, Centre for Policy Development
“The 2023 Federal Budget delivers some key elements of long-term wellbeing for Australia and the region, but these must be accompanied by deeper systemic reforms to change the things that matter most to Australians.”
“Budget measures on early childhood, wellbeing, climate, regional engagement and people- and place-centred reform are welcome and necessary, but will not reach their potential without systemic reforms outside the budget – government is a question of “how”, not simply “how much”.
These include redesigning government service systems to meet the needs of people and communities, enhancing social infrastructure with a guarantee for young children and families, and an inclusive national goal-setting conversation to provide guidance to public decision-makers. The importance of the early years is clear, with the budget investing in vital early childhood education and care for more families.
“This social infrastructure would be aided by the removal of the activity test, which represents a barrier to participation and an impediment to the long-term social and economic benefits to our economy and society. CPD has long recommended universally accessible early childhood education and care, which the Productivity Commission is currently considering.
“The Investment Dialogue for Australia’s Children, between the Commonwealth and the philanthropic sector, on place-based responses to entrenched disadvantage, further emphasises the importance of the early years.
“This initiative, alongside the Stronger Places, Stronger People program and the Social Impact Outcomes Fund, represents a timely reconsideration of the hands-off outsourced service delivery model that has dominated the Commonwealth government for several decades. CPD applauds the collaborative mission-based, locally connected approach that is more in line with building long-term resilience and well-being.
“Measures to address disadvantage and economic exclusion will be impaired by Jobseeker rates that still leave recipients in poverty despite the $40 per fortnight increase. They will also be impaired by an ineffective national employment service that currently needs to support people with barriers to working into decent, sustainable jobs. This is critical to address through the current Workforce Australia Inquiry.
“The budget recognises the urgent need to position Australia for a post-carbon future with the announcement of a Net Zero Authority to guide Australia’s climate transition – a key recommendation of CPD and partners in our sustainable economy work over the past decade. This will unlock investment in renewable energy for swift, just and orderly transition, along with investment in emerging industries to support Australia’s prosperity in the coming decades.
“The announcement of the Hydrogen Headstart program will support the rapid development of a key post-carbon industry. This fund should aim to catalyse rather than compete with private capital, and to create green industry ecosystems that extend beyond hydrogen.”
‘A timely and precise injection of financial support’
Greg Griffith, CEO, National Retail Association
“ At a time when the cost of living is the number one concern for most households, the Budget delivers a timely and precise injection of financial support to those who need it most. This will result in greater confidence and stronger household expenditure, which in turn will boost small business owners and help them increase both pay and work opportunities for their employees.
The NRA is particularly pleased to see inflation projected to return to the Reserve Bank’s target band, which should lead to lower interest rates that would add to consumer confidence.
“We endorse the continuation of the instant asset write-off of recent Budgets; This is a measure that supports retailers in investing in their own businesses while also seeing the benefits of additional spending by other businesses.
“We also welcome the Small Business Energy Incentive. For many retail businesses, particularly those involved in food storage, energy has become an increasingly significant portion of their overheads in recent years.”