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”.
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