Leaders back Rob Scott’s call for measures to generate jobs growth

Business leaders have backed Wesfarmers chief executive Rob Scott’s push for tax reform and other measures to generate jobs growth.

Wesfarmers chief executive Rob Scott called for national cabinet to implement short and long-term policies to bring forward investment and create jobs. Picture: Marie Nirme

Business leaders have backed Wesfarmers chief executive Rob Scott’s push for investment allowances, tax reform and other measures to generate jobs growth and help the economy’s recovery from COVID-19.

JB Hi-Fi boss Richard Murray said he’d like to see the business sector rewarded for investing.

“I think it would be really exciting if the government could do anything to support investment in our digital businesses through investment allowances,” Mr Murray told The Australian.

“Fundamentally business needs to invest, and we know the projects we’ve got and that we need to make sure they stack up.

“There’s no point in the government writing free cheques – business has got to invest first, but if the government can support that and encourage it with investment allowances or training levies, I think that would be awesome.

“Instant write-offs and things like that can be really powerful.”

Mr Murray encouraged the government to prioritise future growth areas, such as the digital economy, construction or retail.

Digital capabilities were critical, he said, and even spanned traditional industries like plumbing, where technology was becoming pervasive.

In an opinion piece in The Australian on Monday, Mr Scott, who is chairman of the Business Council of Australia’s tax and federation working group, called for national cabinet to implement short and long-term policies to bring forward investment and create jobs.

He advocated a 20 per cent investment allowance, after a similar policy was successful in the 2008 financial crisis for purchases of plant and equipment.

Over the long term, the goods and services tax could be changed so other taxes that discouraged job creation could be lowered or removed.

Mr Scott said it should “sound alarm bells” that, for the first time since the 1970s, more funds were being invested offshore than overseas investing in Australia.

“Unfortunately, for far too many Australians, a job is out of reach or at risk,” he said.

“We cannot pin all of Australia’s slow jobs growth and falling investment to our tax system, but it is much to blame.

“We need a cutting edge, competitive tax system that is better suited to 2020, not 1999 when it was last reformed — almost a decade before the first iPhone was invented.”

Treasurer Josh Frydenberg this week said the Morrison government was continually looking at ways to lower taxes, drive investment and create more jobs, and had provided $314bn in economic support for workers, households and businesses during the COVID-19 crisis. The government, he added, knew that investment was an important driver in creating more jobs.

Beach Energy chief executive Matt Kay called for reforms to be accelerated due to the nation’s economic downturn.

“The last six months we’ve gone through a downturn from the pandemic like none of us have experienced in our lifetime,” Mr Kay told The Australian.

“I think governments in Australia have done a very good job of dealing with that to ensure it didn’t get out of hand.

“So I think any improvements we can make between industry and governments in terms of making the processing of developments and any changes to tax measures faster and cleaner is a good outcome, both for industry, government and the nation.“

GWA chief executive Tim Salt said the government’s $680m HomeBuilder stimulus package — as it currently stands — was likely to have a limited impact on the nation’s under-pressure construction sector.

He said an improvement in consumer confidence would provide more of a boost.

“HomeBuilder as a concept I think is really good and I applaud the government for looking to do things to stimulate the building industry,” Mr Salt told The Australian.

“But at the moment I think it’s a little bit too early to call whether that’s going to work in the way that the government anticipates.”

The federal government announced the scheme in an attempt to try to counter a predicted downturn in construction demand.

Additional reporting: Perry Williams , Samantha Bailey