BCA calls for regulatory pare-backs and tax reform as global uncertainty brews

The Business Council of Australia (BCA) has called on the government to implement productivity-boosting measures in the upcoming May budget off the back of the RBA’s rate hike last Tuesday.

BCA chief executive Bran Black said that Australia must embark on productivity, spending and tax reform to bolster the economy at a time of global uncertainty.

“At a time of global uncertainty and rising inflation, the Treasurer is right to say this Budget is even more important and must therefore be ambitious on productivity measures,” he said.

“If we want stronger wages and higher living standards, we need policies that make Australia more competitive for the investment that drives productivity and economic growth.”

Centrally, the BCA has called for regulatory reform, including a 25 per cent reduction in “unnecessary regulatory costs” across the economy.

“Cutting red tape is one of the quickest ways governments can boost productivity and encourage business investment,” Black said.

The business lobby also called for targeted tax reform that would lower the cost of investment and encourage businesses to expand.

As part of this, Black noted the BCA supported the push to simplify and expand Australia’s R&D tax incentive.

“Improving our R&D settings will help attract investment, drive new economic opportunities and support higher living standards,” he said.

“We strongly support reforms to the Research and Development Tax Incentive to make it simpler and more effective, including removing the $150 million cap, streamlining administration and removing the R&D intensity measures.”

The BCA has also argued that Australia could unlock $790 billion in additional foreign direct investment (FDI) by improving its global competitiveness in areas such as regulation, business taxation and investment openness.

“In a more volatile global environment, countries that are most competitive win investment, and that has real consequences for jobs, wages and growth,” Black said.

“If we want Australians to earn more and get ahead, we have to be a place where businesses choose to invest, because this is what creates jobs and grows the economy.”

Alongside its calls for regulatory pare-backs, the BCA said the government should impose policies to fast-track low-risk investments, implement targeted incentives like accelerated depreciation to make investing more competitive, continue to modernise trade systems and restore “balance and flexibility” in labour engagement.

“Australia has strong fundamentals, but we are falling behind in some of the areas that matter most to investors, including regulation, tax competitiveness and investment settings, which makes it harder to attract global investment,” Black said.

“If we do not attract that investment, it does not disappear – it goes elsewhere, along with the jobs, innovation and economic growth it supports.”