Australian Industry Group CEO Innes Willox says targeted support and concessional loans are an important first step, but warns the government faces a difficult balancing act as supply chain pressures from the Middle East crisis grow.
The Australian Industry Group has backed the federal government’s targeted support measures in response to the Middle East crisis, while warning that more coordinated action may be needed as supply chain pressures continue to build.
Ai Group Chief Executive Innes Willox said concessional loans and fuel reductions announced by the government were an important part of ensuring all tools were available to address the growing economic impact of the crisis.
“Targeted support to impacted industries, concessional loans and fuel reductions should help alleviate some of the acute supply chain pressures caused through the Middle East crisis,” Willox said.
Willox called for a nationally coordinated approach involving both federal and state governments to manage the consequences of disruption across fuel and industrial markets.
“A nationally coordinated approach, with support from the states to manage the consequences of disruption in fuel and industrial markets, is what is required as challenges change and grow in coming months,” he said.
The Ai Group said it was receiving real-time feedback from members across the country, with some businesses already considering significant measures to manage higher prices and emerging gaps in supply chains.
“Some of them are having to consider pretty serious ways to combat higher prices, deal with emerging gaps in supply chains and an unpredictable geopolitical environment,” Willox said.
He flagged that government intervention may be needed across a broader range of industries beyond fuel, including fertiliser and plastics, if the crisis deepens.
“If and when industries are seriously impacted by the crisis, whether for fuel, fertiliser, plastics or other products, there will be a role for government to step in and support continuity,” Willox said.
Willox acknowledged the difficult position facing the government, which must deliver relief across a soft economy without further fuelling inflation or adding pressure on the Reserve Bank to increase interest rates, while managing a strained fiscal balance sheet.
“The Government has an unenviable task to deliver relief and support across the economy, which is already soft, without further fuelling inflation and forcing the Reserve Bank of Australia to increase interest rates, plus deal with a fiscal balance sheet that is already under strain,” he said.
The Ai Group said it would continue working with the government and relevant agencies to identify and address growing risks for businesses and jobs.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
