Federal budget 2024: Business leaders react to the budget
Gerry Harvey’s warehouse power bills have doubled, builders are beset with labour shortages and it’s slim pickings for small business, according to industry leaders.
Business
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Despite a $32bn cash splash on the housing industry, the country’s largest home builder says the federal budget should have done more to address the labour shortage gripping the industry.
In the lead-up to the federal budget, treasurer Jim Chalmers doubled down on his commitment to providing cost of living measures that eased pressures on Australian households.
Australia’s largest house builder Metricon said more funding was required to address labour shortages, which was one of the biggest obstacles during the past two years.
Metricon CEO Brad Duggan said he was supportive of the federal government’s ambitious plan to build 1.2 million new homes over the next five years, but the budget fell short.
“The government has a pivotal role for the housing industry and in providing certainty and consistency,” Mr Duggan said.
“I would have liked to see more incentives for employers to take on more apprentices because that’s the most successful way in which these professions can be developed over time.”
The budget will include nearly $90m to cover the education costs of 20,000 people which the government hopes will boost workers in the construction industry.
“For an industry that contributes 10 per cent of GDP and about nine per cent in overall employment, I think $90m to address the size and depth of the workforce really needs to be looked at,” Mr Duggan said.
Harvey Norman co-founder Gerry Harvey expressed disappointment with Australian politicians and their handling of the economy.
The 84-year-old billionaire said the government was playing politics instead of reducing costs.
“You’ve just got to realise that there’s a lot of bulls**t that goes on in this world and you should take it with a grain of salt. It doesn’t matter which party you’re talking about - they’re just playing politics,” Mr Harvey said.
“We operate in eight different countries, the only other country in the world that’s as bad as Australia is New Zealand.”
Mr Harvey revealed his energy costs had doubled in the past two years.
“The budget won’t make a bloody difference because we’re playing politics,” he said.
“When I look at what it costs me now to run my warehouses as opposed to a couple of years ago, it’s 100 per cent more. Anything you do at the moment in development costs is just so high and the government is not doing anything to reduce that.”
Master Builders CEO Denita Wawn praised the budget for recognising the importance of a holistic, cross-portfolio approach to solving the housing crisis.
“We particularly welcome the hard work being undertaken in the skills and housing space to really set the scene to enable us to focus on building and increase labour shortages,” Ms Wawn said.
“We are disappointed that there was no additional funding provided to the Fair Workers ombudsman to continue to investigate illegal activities of building unions on sites.”
The Property Council of Australia, while welcoming the budget focus on housing, warned the removal of investment hurdles is still required for the country to hit its ambitious and essential housing targets.
Property Council CEO Mike Zorbas said the $1bn in new money for last mile infrastructure to unlock new housing supply was only a downpayment on the money needed to bridge the housing gap and better plan all aspects of our cities.
“This Budget contains solid investment in housing – particularly for the most vulnerable - and the better planning of our cities,” Mr Zorbas said.
“To hit 1.2 million homes by 2029, we need to improve investment settings, incentivise housing approvals, further boost gold medal housing options including retirement living, purpose-built student accommodation and build-to-rent housing and bring more tradies in from overseas to complement domestic capacity,” he said.
The Australian Chamber of Commerce and Industry (ACCI) said the budget was treading a narrow path to tackle short-term demands for small businesses.
ACCI chief executive officer Andrew McKellar said the budget delivered ‘slim pickings’ for small businesses.
“While ongoing energy bill relief is welcome, and the extension of instant asset write-off will help some businesses, there are limited measures to address the surging impact of red tape on small business,“ he said.
“Small business owners will find very little comfort or reassurance in this Budget.”
The Business Council of Australia said the budget has taken some positive steps towards making Australia more globally competitive and called on the government to go further by improving investment fundamentals to lift productivity.
“We must focus on getting the investment fundamentals right, given that increasing productivity is the best way to address the challenges we face,“ BCA CEO Bran Black said.
Accounting body CPA Australia said small business owners across Australia will be feeling a bit underwhelmed by the budget.
“Fuel costs, power bills and various other inflationary pressures are having a hugely detrimental impact on many small businesses,” said CPA Australia CEO Chris Freeland.
“Small businesses – most of which already have very thin margins – desperately needed a budget that would help alleviate the cost pressures they are facing on a daily basis.
“While the emphasis on relieving pressures on household finances was expected, a more business-centric budget would benefit all Australians as small businesses are significant contributors to the economy and job creation.”
Mr Freeland welcomed the one year extension to the instant asset write off for smaller businesses. However, a more permanent solution would provide the certainty business owners desire.
“While instant write-offs and subsidies for power bills are welcomed, the truth is small business needs more support, particularly those in energy-intensive sectors,” said Mr Freeland.
“The budget confirmed investments in supporting businesses in distress and those facing mental health issues, but there is little in the way of additional funding for programs aimed at preventing businesses getting into trouble in the first place and enhancing business owners’ skills to help these businesses grow.”
A senior economist for the Australian Institute, Matt Grudnoff, said the budget “lacked ambition”.
“Budgets are a question of choices, and the government has chosen to bank a surplus over measures to reduce inequality or tackle a fall in real wages,” Mr Grudnoff said.
“Changes to Commonwealth Rent Assistance are much needed, but the fact remains that the budget lacks the ambition required to address the underlying causes of growing inequality, especially access to affordable housing.”
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Originally published as Federal budget 2024: Business leaders react to the budget
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