Economy and Productivity
The economy relies on a strong building and construction sector, one which employs one in ten working Australians, contributes three dollars back into the economy for every one dollar invested and is entrenched across many sectors from manufacturing, professional services, and local small businesses.
Stronger building = Stronger economy
The building and construction industry is a significant part of Australia’s economy and provides full-time employment and support for small businesses. Small businesses in this industry drive innovation, train apprentices, and create jobs.
What are the challenges?
However, high business taxation levels can lead to inflationary pressures and hinder productivity growth. Lowering taxes and incentivising productivity-enhancing building work can lead to more investment and job growth.
How do we fix them?
- For a temporary period, enhanced depreciation allowances should be provided to non-residential building work financed by the private sector and shown to be productivity boosting in nature. This could include education, IT, distribution, agricultural, industrial and commercial projects, amongst others.
- The existing Technology Investment Boost and Skills and Training Boost for small businesses should both be extended to the end of June 2025 and adapted to ensure that non-employing entities like sole traders and partnerships are able to fully avail of the benefits. Given the sharp rise in costs since the announcement of the schemes, consideration should be given to lifting the maximum annual deduction from $100,000 at present to $110,000 to $120,000 going forward.
- Incentives to business, particularly small business, including tax breaks for productivity enhancing investment in digital and IT systems; and more generous treatment of capital building works.
- Extend cuts to company tax for businesses over $50 million turnover.