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Ai Group Federal Budget submission – Lift long-term economic capacity and dynamism to address risks

The national employer association Ai Group today released its Federal Budget submission highlighting action necessary to address the potential risks to economic recovery over the coming year and to take steps to lift the longer-term capacity and dynamism of the Australian economy with a particular focus on skills development and education.

Ai Group's Chief Executive Innes Willox said: "Ai Group is wary that the economic lift we have seen to date may be more of a policy-led bounce than a self-sustaining recovery.

"With key elements of fiscal stimulus already ended or due to end in March, there remains the risk that any recovery could stall, and business and consumer confidence could deteriorate during the second quarter of 2021. This is even though, under current settings, considerable stimulus from other measures will continue to flow over the year ahead and beyond.

"While the picture will become clearer over the next couple of months, an early announcement of key measures that could take effect in the second quarter could address the risk of a premature wind down of fiscal support. There is no sign that adopting such measures would place prices or wages pressure on the economy.

"These measures could include targeted support for businesses and employees experiencing ongoing severe impacts from Covid-19; additional support for the employment and retention of apprentices and trainees; a new national cadetship program and a relatively modest extension to the immediate expensing of depreciating assets measure.

"Beyond the important issue of the extent and timing of further stimulus, the 2021-22 Budget is an opportunity to take further steps to address underlying fragilities in the economy that were evident well before the onset of the COVID-19 crisis.

"For this Budget, Ai Group proposes a concerted effort to build on the start that has been made in modernising Australia's approach to education and training. The measures proposed are keys to lifting opportunity, employment and employability; to securing longer-term productivity gains; and to improving social mobility and social cohesion.

"We also propose measures across a range of policy areas including in the development of the digital capabilities of businesses and other organisations; in advancing energy efficiency; supporting the advance of hydrogen as an energy source; and accelerating the development of a domestic recycling industry.

"The submission also proposes several measures that will help reduce the most severe impacts of the current disruption to immigration. These include federal support for the states and territories to expand quarantining capacity both as a means of increasing the pace of return of Australians abroad and to create opportunities for the inflow of non-Australians to address key areas of skills shortage.

"We also propose the Federal Government create new pathways for the conversion of temporary work visas into permanent visas. This would apply to people currently in Australia and would address the restrictions in many visa categories against looking for different work opportunities," Mr Willox said.

Ai Group's full submission to the 2021-22 Federal Budget is available at this link.

Key measures proposed in AI Group's submission

  • Put in place a targeted program of support for employees, businesses and their supply chains experiencing ongoing severe disruptions from COVID-19 restrictions.
  • Raise apprenticeship incentive rates.
  • Establish a new national internship and cadetship program that encourages businesses to provide employment opportunities for VET and higher education students.
  • Promote the uptake of higher apprenticeship initiatives by providing employer incentives and addressing systemic challenges to their implementation.
  • Strengthen VET – industry engagement through the establishment of a national industry advisory body.
  • Provide targeted funding to GTOs to support their activities to help disadvantaged groups, and to help SMEs participate in the apprenticeship system, similar to the previous Joint Group Training Program.
  • Build leeway into the immediate expensing of depreciating assets measure so it is available for investments where contracts have been signed by 30 June 2022 and where the new assets are installed and ready for use by 30 June 2023.
  • Extend the funding for the International Freight Assistance Mechanism (IFAM) until our international borders have re-opened and international flight schedules have normalised.
  • Offer matching funds for new or additional state and territory energy efficiency policies, with a requirement for information-sharing on these programs between jurisdictions.
  • Allocate at least a further $500m for an expanded second round of ARENA's existing $70m hydrogen deployment funding round.
  • Expand the capacity of quarantining arrangements including to accommodate greater numbers of returning Australian citizens.
  • Increase permanent migration ceiling from 160,000 to 190,000. Measures should be taken to ensure that in-country temporary workers are more readily able to become permanent migrants free from the restrictions associated with visa categories that currently do not permit a pathway to permanent migration.
  • Build on the commendable initiative to support the supply and distribution of COVID-19 vaccines among Pacific nations and ASEAN neighbours.
  • Restructure the Fair Entitlements Guarantee (FEG) to improve equity and reduce major budgetary risks.
  • Improve the integrity of tobacco taxation as recommended by the Parliamentary Joint Committee on Law Enforcement.

Media enquiries: Tony Melville – 0419 190 347