Business leaders ranging from Commonwealth Bank chief Matt Comyn to Woolworths boss Brad Banducci and retail billionaire Solomon Lew have praised the federal budget, saying the measures announced will help rebuild an economy battered by the COVID-19 pandemic.
On Tuesday night, the federal government announced billions in budget measures which are set to directly benefit businesses, including massive asset tax breaks, wage subsidies for young employees, and accelerated income tax cuts which are set to spur spending in the retail sector.
CBA chief executive Matt Comyn says the federal budget will spur economic growth.Credit:
Commonwealth Bank of Australia chief executive Matt Comyn singled out the asset write-off scheme, which allows businesses earning less than $5 billion annually to deduct the full cost of buying an asset worth up to $150,000, as an efficient way to stimulate spending.
"In particular, we welcome the financial support to encourage business to invest in new equipment, take on more skilled workers and provide new opportunities for young people that together over time will help to bring down the rise in unemployment," Mr Comyn said
The scheme will cover 99 per cent of Australian businesses and National Australia Bank chief executive Ross McEwan said will help drive the country's economic activity through the pandemic.
"We must do everything we can to support and strengthen businesses right now and the budget measures announced by the government will certainly help to do that as we begin to transition from support to stimulus."
The government has also put aside $2 billion towards the research and development tax incentive scheme, with Treasurer Josh Frydenberg calling digital technology "critical to Australia's future prosperity".
Mr McEwan said R&D incentives had been among the key issues raised by the bank's business customers, "so it's good to see measures addressing this area".
The budget’s $26.7 billion instant tax break policy to encourage business investment has been also warmly welcomed.
“It is exactly the right thing to do,” said Alberto Calderon, CEO of ASX-listed explosives manufacturer Orica.
“Australia has the lowest ratio of private investment over GDP in about 60 years…the only way that countries grow in the long term is through private investment, there’s no other way,” he said.
Cameron McIntyre, CEO of online vehicle classifieds site Carsales, said the $26.7 billion instant tax break policy was a great idea.
“We obviously invest heavily in technology…It’ll encourage us to invest more in that space and maybe potentially take a little bit more risk, which is not a bad thing either, given the time that we’re in at the moment,” he said.
Under the policy eligible companies will be able to deduct the full cost of depreciable assets of any value in the year they are purchased, from now until the end of the 2021-22 financial year. The government has said about 3.5 million Australian companies will be eligible for the incentive.
Mr McIntyre also backed personal income tax cuts, which he said would hopefully encourage consumer spending.
“I think any policy that’s putting more money in the hands of consumers at the moment is good policy. It encourages consumers to get out there and spend,” he said.
Meanwhile, retailers have praised the income tax cuts and the $200-a-week 'JobMaker' hiring credit introduced in the budget.
Premier Investments boss Solomon Lew said the budget was one of the best he'd seen. "In my business career I have never witnessed such a well-thought out budget, one that benefits nearly every single business in the country," he said.
"It cannot be understated just how much this will provide a shot in the arm to employment, youth job creation, consumer confidence and spending. This budget will help bring the Australian economy out of the doldrums and back to where it needs to be"
Premier Investments owns brands such as Smiggle, Peter Alexander and Just Jeans, and employs a number of young casual staff.
Brad Banducci, the chief executive of supermarket giant Woolworths, also expressed his support for the economic measures in the budget, along with the $100 million pinned to allow twice the number of annual Medicare-subsidised sessions with a psychologist or mental health professional.
"We welcome the budget as a positive measure to move the economy back towards a path of sustainable economic growth and job creation," Mr Banducci said.
Despite the fulsome praise, the lack of longer-term reform of industrial relations or business investment laws remains a sore spot for businesses.
Coca-Cola Amatil boss Alison Watkins Coca-Cola Amatil boss Alison Watkins says the federal government shouldn’t lose sight of longer-term reform.Credit:Louie Douvis
Coca-Cola Amatil boss Alison Watkins said while the budget prioritises recovery the government must not shy away from reforms in politically difficult areas, such as corporate tax.
“We mustn’t lose sight of the need for longer term reform, including greater flexibility in industrial relations and making the company tax system more competitive.”
“It’s important the government steps up on these areas in 2021 in order to drive long-term sustainable growth and make sure Australia emerges stronger and better than ever,” she said.
Bunnings owner Wesfarmers’ boss Rob Scott also echoed the sentiment, saying that while the budget was "highly stimulatory", he had hoped for more action on the matter of tax reform.
"On broader and more fundamental tax reform, there still remains much to do and we look forward to seeing more on this over the next year," he said.
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