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The economy may face its own version of “long COVID” unless the government provides support for businesses in the upcoming 2022-23 federal budget, according to CPA Australia.
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Economy at risk of ‘long Covid’ without budget support for businesses
02 February 2022
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Ahead of the March federal budget, CPA Australia has made its budget submission to the Australian government, with the key message highlighting the need for short-term business support and longer-term economic transformation.
CPA Australia said that targeted support holds the key to helping businesses manage future disruptions.
“It’s increasingly likely that many businesses will experience ongoing disruptions for the whole of 2022, and potentially beyond,” CPA Australia senior manager business policy, Gavan Ord said.
“Rolling outbreaks, leading to worker shortages, supply chain issues and reduced consumer spending, may mean that trading conditions wax and wane all year.
“Accountants are staunch advocates of prudent financial management. Ultimately, the government must balance the cost of providing business support against the benefits and risks of doing nothing. On balance, we think the benefits outweigh the cost.”
Mr Ord warned that the economy faces its own version of “long COVID” if support isn’t available to help businesses manage future outbreaks.
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“The overall success of measures like JobKeeper and Cash Flow Boost in keeping businesses afloat will be undone if we make good businesses go it alone now,” he added.
“While we’re not opposed to direct financial support in some circumstances, we think the best approach is to use the budget to better prepare businesses to manage future crises and position them for growth.”
CPA Australia’s top budget recommendations include support for digital transformation and increasing the skilled labour pool.
“Australian small businesses have one of the lowest levels of digital adoption in the Asia-Pacific, according to our annual Small Business Survey,” Mr Ord commented.
“As online business grows, so does the risk of being overtaken by global competitors with better technology. Other APAC governments have implemented ambitious programs to build small business digital capability. We must too.”
CPA Australia noted that skills shortages were also an issue in Australia well before the pandemic.
“Increasing the size of the skilled labour pool is essential to supporting Australian businesses, jobs and our economy,” Mr Ord said.
“The budget should increase the number of free or highly subsidised training places in areas with the greatest skills needs.”
Easing regulatory requirements and ensuring better access to advice
In the submission, CPA Australia has also called on the government to ease regulatory requirements. Mr Ord noted governments have put a lot of regulatory changes on hold over the past two years.
“Now is not the time to play catch up with this backlog,” he added. “Including fewer new regulatory measures in the budget will give businesses the breathing room they need to focus on current challenges.”
Better access to advice also becomes important as distressed small businesses often struggle to access advice, even though it could mean the difference between survival and collapse, according to Mr Ord.
This means the government should consider providing financial incentives, possibly in the form of a voucher or grant, to help small businesses access advice from their trusted adviser.
CPA Australia also highlighted that economic transformation trumps debt repayment in this year’s budget.
“Calls to pay down public debt will inevitably grow louder. In our view, Australia’s net debt is manageable and low by international standards,” Mr Ord explained.
“With our nation confronting economic issues such as weak productivity, an ageing population and climate change, the government’s long-term fiscal strategy should prioritise economic transformation.”
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