PERTH (miningweekly.com) - The Australian Petroleum Production and Exploration Association (Appea) has called on the federal government to instigate more measures to boost investment and spending ahead of the federal Budget.
“Australia entered its first recession in more than 30 years in June last year, halting more than three decades of continuous growth. Thanks to the swift actions of the Australian government last year, implementing several short-term incentives such as temporary full expensing and loss carry back measures, Australia bounced back from its first recession in 30 years and was on track for growth by the end of 2020.
“However, Appea believes that this year’s Budget can go a step further to lock in sustained growth and job creation. Currently, the federal government has made driving unemployment to lower than 5% a key part of its fiscal strategy, a strategy that can be achieved through increased investment and productivity."
Appea said in a statement this week that capital-intensive industries could play a key part in achieving this goal under the right conditions.
“Industries such as construction, mining, oil and gas, agriculture, and infrastructure can take several years to complete once an investment decision is taken. During a time of recovery, the scale of such projects can provide a level of stability that ensures long-term job security.
“Ensuring job security in this manner with well-paid positions can provide the necessary base to boost household spending in line with the federal government’s current fiscal focus,” Appea said.
The industry body urged the government to consider additional reforms to support its key fiscal strategy.
“Simple and effective measures that all business can benefit from such as improving accessibility to instant asset write-offs and the temporary full expensing measure would stimulate investment and productivity.
“To attract investment geared towards large-scale capital-intensive projects, shortening the period of time that an asset is depreciated over and ensuring labour costs are fully deductible will significantly improve the investment economics and reduce fiscal burdens at a minimal cost to government revenue.
“Put simply, there is an opportunity in this budget and for the next 12 months for government to improve long-term investor confidence. This confidence would be further improved through the government’s continued focus on deregulation.”
Appea noted that for the oil and gas industry, streamlining of duplicative regulations between the federal government and states and territories would also benefit the economy.
Appea, along with a number of other industry bodies, have called on the federal government to implement a number of reforms, including expanding the availability of the temporary full expensing and loss carry back measures and making these measures a permanent fixture of the taxation law to avoid lost opportunities for jobs and investment, while also lowering the access threshold for the instant asset write-off.
The government has also been urged to ensure salary and wages costs are immediately tax deductible for capital-intensive industries, and to remove barriers to business project restructuring by reforming the rules around transactions involving swaps of assets, permits and existing infrastructure in Australia, making them tax neutral.
The industry bodies have also called for continued focus on removing, or at least reducing, distortions and barriers that impose unnecessary regulatory and tax burdens on business activity, and further commitment to long-term funding and support of skill retraining and development to create a more mobile and flexible work force to maximise active participation in the economy.
“By implementing these measures, the 2021/22 Budget can provide the means for increased investment and productivity, providing additional security for key capital-intensive industries, boosting job security and strengthening the Australian economy,” Appea said.