Frydenberg backs businesses to lead recovery

Australian Chamber Chief Executive Andrew McKellar, Federal Treasurer The Hon Josh Frydenberg MP, Victorian Chamber President Karyn Sobels and Victorian Chamber Chief Executive Paul Guerra

Government settings must allow business to flourish as Australia embarks on its recovery from the pandemic, the Federal Treasurer Josh Frydenberg has told a pre-election breakfast hosted by the Victorian Chamber and Australian Chamber of Commerce and Industry at Kooyong Lawn Tennis Club.

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As Australia prepares to head to the polls on May 21, Mr Frydenberg said the Coalition’s Budget and economic plan will support small business and ensure Australia’s post-COVID-19 economic recovery continues to lead the world. 

“Governments can only do so much. We can set rules of game, we can put incentives in place. But ultimately it’s business, it’s people who take decisions to business invest their own money, take on a new worker, train that worker and invest in their business. 

“So one of the key principles for the Prime Minister and I, from day one of this pandemic, was don’t embed in the budget long-term structural spending in response to a once-in-a-century pandemic. 

“Do what you need to do at the time to stem job losses, provide security for the economy, but once health restrictions ease, allow those emergency support measures to end and allow business to flourish.” 

Despite a positive outlook, Mr Frydenberg warns of ongoing geopolitical and financial uncertainty, with the UK, US, Canada, NZ also lifting cash rates, which should “remind everybody” of the need for strong economic management. 

“We are facing global inflation, the likes of the world hasn’t seen in decades,” Mr Frydenberg said. “It’s a reminder why you have to get your economic setting right”. 

He appealed to his government’s record, noting 1.4 million people lost their jobs or had their working hours reduced to zero because of COVID-19, but today’s unemployment rate is 4 per cent, the equal lowest in 48 years. 

“This is after an economic shock that was 30 times the size of the global financial crisis,” he said. “We are an outlier in the best possible sense of the word, growing faster than any other major advanced economy in the world.” 

Mr Frydenberg said the private sector was driving this recovery with business investment soaring and leading the world. 

He said this was a result of an economic plan that is working – including JobKeeper, lower taxes, the SME guarantee scheme, skills investment and asset write-off incentives. There are a record 220,000 apprentices in the workforce, driven by a half-wage subsidy. 

The Federal Government’s Budget sets a plan on easing cost of living pressures and fostering 1.3 million new jobs through further business investment, including a 120 per cent tax deduction for small businesses who invest, upskill and adopt new technology. A skills package includes grants for apprentices and employers who take them on. 

There is also funding for manufacturing and more resilient supply chains, biotechnology such as the mRNA facility in Victoria, and a regional focus that includes energy investment. 

“I stand here knowing the Australian economy is more than glass half full, in really good shape,” Mr Frydenberg said. “Yes there are cost of living pressures, and that’s why we’re responding to them. There is high inflation and that’s a global phenomenon. 

“But we have an unemployment rate that continues to come down, we have household and business balance sheets that have built up that will support economic activity going forward, and we have business investment that shows great confidence in the future of the Australian economy.”  

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