“Big spending budget” suits the times: Ai Group

The Australian Industry Group has welcomed Tuesday night’s federal budget as suitable for the worst economic downturn since the Great Depression in the 1930s, describing it as “stimulatory, inclusive, confidence-building and forward-looking.”

The 2020-2021 federal budget predicts GDP to shrink by 1.5 per cent in the year, with non-mining business investment falling 14.5 per cent, and the current effective unemployment rate close to 10 per cent.

“The new investment allowance that allows businesses with turnover below $5 billion to immediately expense the cost of capital equipment installed before July 2022 will provide a critical boost to investment, productivity and job creation,” said Ai Group chief executive Innes Willox in a statement.

“The tax loss carry-back measure available for businesses with turnovers of less than $5 billion will provide invaluable cash flow support for many businesses suffering from the current crisis.

“The provisions will apply in relation to losses in the current and 2021-22 financial years.”

The industry association also singled out for praise the 100,000 extra apprenticeship places, the subsidy for unemployed younger workers, and the reworking of planned changes to the R&D tax incentive, which “appears likely to substantially address the range of business concerns with the changes.”

The deficit for this year is estimated at $213 billion. According to Willox, the necessarily “big-spending budget” was “spending up big on the areas required to turn around the economy”.

Picture: budget.gov.au

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