Federal Budget 2019-20
Despite the Australian economy showing signs of strengthening across a range of measures, such as GDP and employment growth, a number of persistent macroeconomic challenges remain. The Chamber of Commerce and Industry Queensland (CCIQ) is concerned about Australia’s ability to sustain long-term economic growth, as well as its ability to continue to raise national income and living standards. Current high level of household and net foreign debt, weak multifactor productivity growth and Australia’s lagging international competitiveness pose both immediate, and medium to long term risks to the health, sustainability and stability of the Australian economy. This is occurring against a backdrop of a slowing global economy with significant structural imbalances, especially global debt.
CCIQ commends the Government on its ambition to deliver sustainable budget surpluses from 2019-20 and beyond and welcomes recent progress to achieving this goal with the Mid-Year Economic and Fiscal Outlook showing an improving fiscal position. However, concerns remain that this improvement has largely been driven by higher than expected revenues resulting from short-term economic factors, and cautions that any delivered surplus must be supported by further budget repair that addresses structural challenges to the Commonwealth’s finances.
Ultimately, the Government’s tax and spending decisions, as well as any policy announcements made in the lead up to the upcoming federal election should aim to:
- deliver optimal policy outcomes
- improve Australia’s ability to manage external economic shocks
- increase the productive capacity of the Australian economy
- improve the budgetary and public debt position, and
- improve Australia’s international competitiveness.
With these objectives in mind, CCIQ has sets out the following policy recommendations for consideration by the Federal Government in the upcoming federal budget.