2021-2022 Federal Budget: Extended tax incentives and accelerated cuts much needed boost to business

 Tonight’s federal budget announcement has laid out plans to further stimulate Australia’s economic recovery and strengthen the job market through accelerated tax cuts and investment incentives for small and medium businesses. 

Chamber of Commerce and Industry Queensland (CCIQ) General Manager of Advocacy and Policy, Amanda Rohan said tax incentives and an accelerated reduction in the tax rate for small and medium businesses to 25 per cent from 1 July 2021 would help further stimulate jobs and capital investment. 

“The multi-billion-dollar boost to Regional infrastructure spending and skills training, along with a substantial $1.2 billion rescue package for tourism and aviation sectors was much needed for COVID-19 recovery,” Amanda Rohan said. 

CCIQ’s head economist Jack Baxter said commitments to the digital economy strategy and disaster preparation and mitigation projects that will further cushion the economic impact of COVID-19 and natural disasters has also provided a boost for Queensland businesses. 

However, Mr Baxter warned disruptions from COVID-19 still create business and consumer uncertainty and required a focus on improving the economy’s longer-term competitiveness and enabling businesses to diversify, lift productivity and drive economic growth.  

“Although there was substantial support from the Government and Reserve Bank through fiscal and monetary policy to cushion the economic impact of COVID-19, it ended almost 30 years of sustained economic growth,” he said. 

“Removing impediments through further tax reform at state and federal levels must also be on the table, particularly payroll tax, fringe benefits and luxury car tax, to name a few. 

“For example, in Queensland, $4.2 billion of payroll tax revenue in 2020 is equal to approximately 50,000 full-time equivalent jobs. 

“While payroll tax is a state issue, the Commonwealth must do more to assist the states and territories make significant changes, enabling businesses to generate confidence and stimulate the economy through expenditure. 

“A longer-term focus on investments in productive infrastructure, including those necessary for the 2032 Olympic games, was also a key priority for CCIQ and its members. 

“Australia’s population is expected to resume its strong upward trend when COVID-19 travel restrictions are eased, rising from nearly 26 million to 30 million by 2030. 

“Major cities are under strain and further investment in regional infrastructure is required across a range of areas including transport, communications, energy, water and waste. 

“We look forward to the Queensland State Government’s upcoming budget and initiatives aiming to accelerate the delivery of the priorities identified through the Federal Budget,” Mr Baxter said. 

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