Federal Budget 2022: Major WA business groups push for ways to ease skills crunch, fiscal responsibility

By 26/03/2022News

Article by Adrian Lowe courtesy of the West Australian.

WA’s major business lobby is urging a fiscal rebalance and immigration policy changes to help alleviate the skills crunch ahead of next week’s Federal Budget.

The Chamber of Commerce and Industry WA says two years of stimulus to manage through the pandemic “has done its job” and with unemployment headed below 3 per cent for the first time since the 1970s, changes to allow more people into Australia to work would go some way to prevent inflation rapidly climbing.

It’s a call supported by the Association of Mining and Exploration Companies, which has backed billionaire Gina Rinehart’s call to adjust social security settings to allow retirees to return to the workforce without incurring penalties.

In a series of pre-Budget announcements this week, the Government has already committed to a focus on apprenticeships and trades, and reforms to PAYG taxes for small business operators.

The Prime Minister’s visit to WA last week also included funding commitments for rare earths projects and $200 million for critical minerals.

CCIWA chief economist Aaron Morey said the clear focus of the Government needed to be on addressing supply-side issues.

“Some reforms to bring in skilled workers. And we’re really keen to see an increase in the permanent migration cap to make it easier for businesses to bring in workers (and) by doing things like streamlining labour market testing,” he said.

“We need to be looking at fundamental policy issues around tax reform and workplace relations reform to encourage business to invest, and we need to be looking at making it easier to bring in workers.

“Small businesses are deserving of support but it needs to be targeted and temporary, and we need to have our eye on returning the budget to a more sustainable fiscal position because eventually those interest rates are going to rise and the burden of servicing that debt comes.”

AMEC chief executive Warren Pearce said increased skilled migration was “desperately needed”, as was more flexibility around restrictive categories. And lateral thinking about boosting worker numbers was needed, he said.

“Retired people being allowed back part-time without giving up their social security, that would allow us to bring back some expertise and knowledgeable workers to the sector at a critical time, but the barrier of giving up entitlements once they reach a certain working age becomes a barrier to that,” he said.

“We’re a country whose growth largely lies on increased population through migration. We need a more open mindset.

“If the Commonwealth could start to reset some of those government and community attitudes, it would be immensely beneficial. We’re scrambling for people and we’re not the only ones.”

Mr Morey said “unsustainable commitments baked into the Budget” should be avoided because it was unwise to continually rely on bumper commodity prices to maintain the country’s fiscal position.

He also urged changes to childcare taxes to allow more centres and easier parental leave arrangements to enable more people — predominantly women — to participate in the workforce.

HLB Mann Judd business advisory services director Rowan Tracey said the changes to PAYG were already possible, but businesses needed to raise the matter with the Tax Office.

“Whether this reduction will be sufficient, you would suggest that would depend on the health of the biz. It will be grossly insufficient for some, depending on circumstance,” he said.

“Particularly large businesses would be across their options when it came to managing their tax payments, but the unsophisticated taxpayer probably benefits from (this) unknowingly.”

The Government is also changing how frequently microbreweries have to report excise, while some alcohol businesses will be able to have excise returns automatically paid and lodged quarterly.

Blasta Brewing owner Steve Russell said given the rapid growth in the microbrewery sector, the changes would particularly benefit fledgling operators but “anything that relieves this sort of administrative burden from us always going to be happily accepted”.