Business leaders plead with Albanese, Dutton for bigger response to Trump tariffs

Business leaders are urging Labor and the Coalition to take stronger measures to shield Australia from the economic shock of a global trade war as they warn about damage from tariffs unleashed by United States President Donald Trump.

The nation’s peak industry groups joined forces to demand more action to lift domestic growth in response to the global turmoil, naming tax reform and red tape as two areas for the two major parties to tackle in the next term of parliament.

The alliance, which includes 20 groups ranging from big business to small employers, wrote to Prime Minister Anthony Albanese and Opposition Leader Peter Dutton to warn that private sector growth was too weak at a time of growing volatility.

“In the last year alone, businesses paid $143 billion in company tax. That’s enough to pay for all federal spending on health and aged care,” they wrote.

“Yet we have one of the least competitive tax systems among comparable nations. We’ve burdened our economic engine room with countless new pieces of regulation and red tape.

“And the prosperity of all Australians suffers while our productivity lags. That’s why we need an agenda to boost business opportunities in the next term of parliament.”

Peter Dutton and Anthony Albanese are vying for the prime ministership as the world is being upended by Trump’s tariffs.Credit: James Brickwood, Alex Ellinghausen

The message was backed by the Business Council of Australia, the National Farmers’ Federation, Master Grocers Australia, the Tourism & Transport Forum, the Australian Chamber of Commerce and Industry (ACCI) as well as the Council of Small Business Organisations of Australia. The groups estimate they represent two million businesses with 7.5 million employees.

The Reserve Bank estimates labour productivity fell 1.9 per cent last calendar year, hurting the ability of employers to offer pay rises to workers.

While Albanese and Dutton have promised to reduce red tape in government, the industry chiefs said this had not done enough to make it easier for companies to invest.

The RBA said in February that the outlook for business investment appeared to be improving, but economists have warned that Trump’s tariff decisions will hurt confidence, increase uncertainty and deter investment.

“When businesses are uncertain, they put the shutters up – and they put off decisions to invest or employ,” independent economist Saul Eslake said.

“I can’t remember an episode like this, when the impact has been the result of deliberate policy decisions. And that’s what so scary about it.”

Farmers’ federation chief executive Troy Williams said farmers wanted less “green” tape on environmental rules, while ACCI chief executive Andrew McKellar said the next government should put a priority on “stalled” productivity numbers and get rid of regulations that curbed growth.

The 20 groups did not put forward an agreed policy, given their different interests, and instead argued that it was up to government to propose ways to toughen the economy against tariff shocks.

“Global uncertainty driven by US tariffs and other world events only intensifies the need to make our economy more resilient and competitive,” BCA chief executive Bran Black said.

“We need both parties to deliver a long-term economic plan to turbocharge growth to generate prosperity for all Australians.”

Both major parties have ruled out major tax changes such as a cut in the company tax cut, but the BCA has argued for an “investment allowance” that would give companies a tax incentive to increase investment.

The business group said a 20 per cent investment allowance would add $17 billion to gross domestic product in a decade while helping companies increase wages.

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