BGA’s Australia team, led by Managing Director Fergus Hanson, wrote an update to clients on the Australian government’s upcoming budget. The update addressed the potential measures that could be announced and the implications for companies.
The government of Australian Prime Minister Scott Morrison will release its budget on May 11, in what is considered a significant development within the context of its priorities and the country’s future outlook.
The plan is expected to focus firmly on employment growth and several key sectoral and area-specific priorities ahead of an election to be called within the next year.
The budget comes amid lingering anxieties about Australia’s economy. While the economic recovery has exceeded expectations on the back of government assistance to households and business, recent global pandemic developments and tensions with China have intensified uncertainty about Australia’s economic outlook.
The government is expected to announce plans for the future of its economic recovery amid the ongoing global coronavirus pandemic. Prime Minister Scott Morrison has said the budget will outline stage two of the National Economic Recovery Plan to promote “a robust, vibrant, business-led economy that can stand on its own two feet.”
Deregulation measures could hold significance for companies in some industries including pharmaceuticals, medical technology services and medical software industries. The budget will invest AUD 120 million (US$92.8 million) in a deregulation package that will include streamlined reporting under the National Greenhouse and Energy Reporting Scheme and reduce the regulatory burden on around 400 companies that lodge 2,000 applications annually in these industries.
Other priorities are also expected to be emphasized beyond Covid-19 plans, including digital skills and women’s empowerment. Morrison has flagged further investment in digital skills in recognition of Covid-19 which he says has accelerated the take up of digital technology “and highlighted the role it can play to support and enhance business operations and the delivery of government services.” He has also said the government will increase child care subsidies to encourage greater female workforce participation.
Beyond this, the government is unlikely to seriously embark on major fiscal repair until unemployment is back at pre-pandemic levels. In the meantime, efforts are expected to continue to be dedicated to battling stubbornly low inflation and interest rates as well as ongoing tensions with China.
BGA’s Australia team will continue to keep you updated on developments at home and abroad as they occur and assess the implications for companies and other stakeholders.