Budget 2021: Spend pandemic savings, says Finance Minister Simon Birmingham

Australians can have the confidence to spend their record-high household savings on home improvements, business ventures and even holidays, the government says.

Australians are being urged to get out and spend their record-high household savings on home improvements, business ventures or a well-earned holiday to help continue the nation’s economic recovery.

At the height of the COVID-19 pandemic Australians saved on average three times more than before the crisis, and with unemployment already recovering much faster than anticipated, the federal government is looking to grow the economy out of debt.

Finance Minister Simon Birmingham says the economy is recovering and Australians should have confidence to spend. Picture: Tim Hunter.

As Finance Minister Simon Birmingham prepares for the 2021-22 Budget — his first in the role — he has encouraged Australians to spend their record household savings to continue the COVID-19 recovery.

“Australians certainly responded in uncertain times by understandably, putting a little bit away for a rainy day,” he told The Daily Telegraph.

“While that’s prudent household management … Australians should look at those record savings and know they’re in a country that is in a strong position.

“And where they’re in a position to invest (savings) wisely, to pursue new ventures, or to give themselves a bit of a break and support the tourism industry at the same time, it would be great for them to do so.”

Mr Birmingham said there was already evidence of “huge levels” of consumer confidence, particularly where it had flowed through into the housing market.

He also said it was an opportune time for businesses to invest in their operations, and revealed the government would look to attract capital from overseas.

“As we look to this next budget, we will be focused on how we can continue to encourage Australian businesses to invest in ways that keep our economic recovery going,” he said.

“Our Investment, Talent Attraction Taskforce is also looking at how we sell Australia’s success to some of the most successful people around the world and encourage more investments and get more job creation in Australia.”

The International Monetary Fund has projected Australia’s economy will grow by 4.5 per cent in 2021, while the country’s debt as a per cent of GDP ranks it well above the UK and US.

To help Australia’s small and medium businesses, Mr Birmingham said there was a “constant stream” of work to “eliminate” unnecessary red tape, including making it easier for them to bid for federal government contracts.

He said by allowing local managers of departments to make procurement decisions, small and medium businesses would get greater access to upcoming projects, particularly after the COVID-19 crisis reinforced the need for sovereign manufacturing capabilities.

“It’s incredibly important that we are conscious about making it as easy as possible for businesses to be able to participate in government purchases and builds,” he said.

Mr Birmingham said the government would also continue to focus on reducing payment times for smaller businesses through wider use of e-invoices and other paper-free processes that reduce processing time.

Originally published as Budget 2021: Spend pandemic savings, says Finance Minister Simon Birmingham