The cost of living will be the centrepiece of the May 3 federal election, with business impacted as much as the rest of the economy, Ai Group Chief Executive Innes Willox said at a special post-Budget webinar today.
“It’s the No.1 issue that both Government and Opposition have tried to address this week in their Budget and Budget Reply measures,” Mr Willox said.
“Polling indicates that, by far, it is the No.1 issue for Australians as they go to the polls.
“Business is feeling it, too. We're seeing a high level of business insolvencies.
“This is still the tale of Covid, plus the ongoing impact of the current economic situation.”
The economy is very fragile, Mr Willox said.
“One of our big concerns is the relative decline in the private sector as a component of the economy over the past 18 months to two years.
“Almost four in five jobs were created in the public sector rather than in the private sector over that time.
“We've seen a relative decline in the size of the private sector, as well.
“We've got real concerns about a deteriorating investment climate for business large and small, as the competition for capital heats up globally.
“We also have concerns around inflation.
“The Budget papers indicate the Government expects inflation to tick up again once its energy rebates, which have been a successful inflation suppressant, are taken away at the end of this calendar year.”
Tax will be a major focus of the election.
“The tax measures announced in the Government’s Budget change the bottom rate of income tax over the next three years — starting from July 1, 2026, and again on July 1, 2027.
“The Opposition said they will not match those tax cuts. Instead, they will go down the path of fuel excise rebates.”
The Trump effect will be felt throughout the election campaign.
“Decisions made in Washington will undoubtedly have a big impact on this election and on the economy as a whole,” Mr Willox said.
“Australia will feel the ripple effects of the Trump Administration’s announcement yesterday of tariffs on automotives and automotive components globally.
“That’s just the beginning.
“Next week, the US will announce a range of new tariffs on different countries. That will impact Australia, directly or indirectly.
“That extra layer of volatility will be a big impact on the election and on how businesses think about decisions already under stress around investment, competitiveness and growth.”
At the webinar, Mr Willox was joined by Ai Group Head of Industry Development and Policy Louise McGrath and Head of Economics and Research Jeff Wilson, who discussed our election policy papers on the key issues that will determine the future wellbeing of Australia.
These papers outline policy approaches that would benefit industry, its workforce and the broader economy.
They cover the following issues:
▪ tax and deregulation
▪ industrial relations
▪ energy and climate
▪ defence
▪ industry and technology and
▪ education, skills and training.
We need a clear election result rather than government by negotiation
Wendy Larter is Communications Manager at the Australian Industry Group. She has more than 20 years’ experience as a reporter, features writer, contributor and sub-editor for newspapers and magazines including The Courier-Mail in Brisbane and Metro, the News of the World, The Times and Elle in the UK.
