In a media release last night, Business Illawarra welcomed Federal Government budget measures likely to boost industry development in energy, defence and housing across the Illawarra and Shoalhaven region.
Read the full release from Business Illawarra below:
The federal government's focus to power Australia with cheaper, cleaner, and more reliable energy positions business in the Illawarra in an ideal place to lead the nation in clean energy design, manufacturing and delivery, Business Illawarra's Interim Director Paula Martin said.
The $1.7 billion Future Made in Australia fund will help bring clarity to our nation's focus on new industries and the expertise, experience and ability for Illawarra's business community can provide key skills and employment in our nascent green hydrogen industry potential, green metals and clean energy.
While Business Illawarra welcomes the focus on domestic manufacturing, there needs to be a solid understanding on the three things that are the fundamentals of innovation: lower taxes, lower energy prices and an industrial relations system that is flexible, modern, and internationally competitive.
If it costs too much to do business here, businesses will simply go overseas. Emerging enterprises will reach their limit here and then move on to friendlier business environments.
Further energy bill relief, a continuation of the instant asset write-off and a partial extension in employer incentives for apprentices are the most welcome measures for small to medium enterprises (SMEs) in the Federal Budget.
Business NSW welcomes the $325 in energy relief for small business owners, who are struggling with spiralling bills. Business owners will also benefit from a continuation of the instant asset write-off of up to $20,000 and a partial continuation of apprenticeship rebates for employers.
SMEs in NSW will receive welcome but moderate benefit from the Federal Budget amid challenging business conditions.
Members will continue to face a difficult trading environment, however, as GDP growth moderates and business investment slows, while there is still a question mark on how quickly inflation will come down.
Businesses seeking structural reform in areas such as energy and tax will see assistance in this budget but may be disappointed by some of the missed opportunities.
The Budget forecasts a $9.3 billion surplus for 2023-24 "the second in 16 years" ahead of a challenging 2024-25. GDP growth is forecast to drop from 3.1% for 2022-23 to 1.75% for 2023-24 and 2% for 2024-25. Total business investment growth is also expected to drop by more than half, from 8.3% in 2022-23 to 5.5% in 2023-24 and 1% for 2024-25.
Unemployment will grow to 4.5% next year. Nevertheless, real wage growth is expected to return in 2023-24, according to Treasury, as the wage growth forecast of 4% exceeds the inflation forecast of 3.5%.
Treasury forecasts a deficit of $28.3 billion for 2024-25.
The modified stage three tax cuts commencing on July 1 offer an average tax cut of $1888 and should provide some positive relief for SMEs that have seen customers ease off on their spending, Ms Martin said.
