The upcoming federal budget is likely to focus on short-term stimulus rather than long-term reform and could see the SG increase delayed, according to accounting and advisory firm William Buck.
The fast-tracking of infrastructure development is likely to be the budget’s “key announcement”, with the $100 billion Infrastructure Investment Program and NBN upgrades expected to be at the forefront of the government’s recovery plan.
“Speeding up these projects will create jobs and assist the country to emerge from the economic crisis, a key focus of this year’s budget,” the advisory firm said.
William Buck also expects the government to delay the legislated super guarantee increase to 10 per cent due to its potential impact on businesses “struggling to stay afloat through the pandemic”, and hopes the government will remove red tape around super contributions.
“It would be good to see some incentivisation in this Budget for people to contribute more and put money back in,” said William Buck director of wealth advisory Adrian Frinsdorf.
“There will be a whole group of workers, hospitality workers particularly, that will have lost out long-term by accessing and reducing their super this year.”
But tax reform is likely to be low on the agenda, something that William Buck says is a “missed opportunity to make substantive reforms”.
“More businesses than ever will have borrowed money this year just to stay afloat,” said Greg Travers, director of tax services.
“I expect there’s been loans going around everywhere and having such a complex system to deal with loans to and from companies makes it really difficult for business owners.”
William Buck also expects the introduction of an investment allowance similar to that introduced post-GFC, giving local manufacturers and international players “the confidence to invest”.
The Prime Minister has spent the lead-up to the budget unveiling a number of key initiatives while managing expectations for a document with the weight of recovery riding on it.
“We can do everything we can to boost Australia’s economy through the measures that will be in next week’s budget and in the JobMaker plan over the next five years,” Mr Morrison told the National Press Club.
“But we will also be vulnerable to the global economy... in that environment, I think Treasury’s task, and the Reserve Bank’s task for that matter is very, very difficult.”
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