Australia is at a crossroads in deciding how we balance short-term issues with longer term uncertainty.
While recent economic data indicates Australia is performing well and there are grounds for cautious optimism now that the vaccination program is in sight, the recovery from the pandemic is irregular and enormous economic and social challenges remain.
This is an opportunity to emerge from the crisis with policies which promote fairer, stronger and more sustainable outcomes.
Resetting the Australian community
- We urge the government to consider ways to enhance the rate of JobSeeker as part of a broader program of work. This includes enhanced re-skilling programs and incentives to embrace opportunities in industries experiencing labour shortages due to the pandemic.
- Government's recovery and rebuilding investments need to create long term inter-generational value, particularly for younger Australians who will be impacted by the economic ramifications of the pandemic and expected higher outlays on health, disability support and aged care.
- Many Australians need advice to financially recover especially those who have accessed their super during the pandemic. We believe single-issue, single topic advice should not require an AFSL, seeking interim relief for this advice until a strategic model to be able to provide more affordable advice is developed.
- The retirement and superannuation system is too complicated for the average consumer to understand without obtaining professional assistance. Ideally a compulsory system should not have such outcomes and CA ANZ encourages the government to address these as a matter of urgency including announce their response to the Retirement Income Review.
- The current design of JobKeeper may not accurately identify businesses operating in sectors and geographic locations whose ongoing financial difficulties are attributable to the impact of the pandemic. More federally targeted assistance programs should be considered with an eligibility criteria considering longer-term business viability, willingness to restructure, and an ability to repay any government assistance provided in revenue-contingent, debt form.
- Urgent Government support is required to enable small businesses to speak with an accredited adviser such as a professional accountant to obtain advice on the viability of their business and recovery prospects. We have made a united call with other bodies for a Small Business Viability Review subsidy to help eligible small businesses access urgently needed professional advice.
- We welcome the insolvency reforms and strongly recommend the legislation includes a full and comprehensive review late this year (within 12 months) to ensure the reforms are operating as intended. We remain concerned at the lack of information in the subordinate legislation on the qualifications, knowledge and experience requirements for restructuring practitioners.
- We urge the government to outline how it will fast-track COVID-safe plans enabling Australian businesses to start travelling again
- Government should inform the Australian business community on the progress of trade negotiations, plans for negotiations with other nations or trade blocs, and how it intends to fast-track these processes.
Resetting the economy
- While recognising major changes to tax policy are likely to be off the table as businesses need a period of policy stability and the government's stimulus measures need time to do their work, it is clear budget repair will not be achieved by economic growth or bracket creep. We suggest government use the Budget as an opportunity to reset community thinking – to be transparent about the difficult task ahead, and to prepare the community for a discussion on possible tax reform options.
- Clarity is needed around the status of announced but unenacted measures such as Division 7A, reforming corporate tax residency and the modernisation of tax treaty programme.
- Extend the loss carry back provisions to sole traders and partnerships and consider making loss carry-backs a permanent feature of the income tax law
- Implement the Board of Tax's recommendations regarding small business CGT rollover
- Introduce a sharing economy reporting regime and a domestic electronic platform regime
- The Government should use key wellbeing aspects in its Budget with goals that address social cohesion, inequality, skills development, the digital divide, intergenerational equity and environmental quality.
- A clear direction for Australia's pathway to a net zero emissions economy should be outlined. The Australian Sustainable Finance Initiative Roadmap recommends the establishment of targets and trajectories to support net-zero aligned decisions.
Australian Federal Budget 2021-22
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