This article was authored by Charles Watson, GM – IR, Policy & Governance at The Real Media Collective.

Federal budget 2022

Next Tuesday, 29 March, Treasurer Josh Frydenberg, will deliver the federal budget for 2022. Attempting to balance the needs of the country with creeping inflationary forces, deficits and national debt caused by COVID support schemes over the last two years, ongoing supply chain issues, and recent natural disasters will be a significant task.  Conversely, the budget purse will benefit from the decreasing unemployment rate, currently at 4%. Additionally, this budget is being delivered as we head towards a Federal election in May so it will make for interesting viewing and reading.

Current economic conditions

Contextually, this budget will be delivered a week prior to the Reserve Bank Board meeting on 5 April 2022 which will consider the need, or not, to increase interest rates. The Reserve Bank’s aim is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. To achieve these statutory objectives, the Bank has an ‘inflation target’ and seeks to keep consumer price inflation in the economy to 2–3%, on average, over the medium term. The RBA’s central forecast is for underlying inflation to increase further in coming quarters to around 3.25%, before declining to around 2.75% cent into 2023 as the supply-chain problems are resolved and consumption patterns normalise.

What we are looking for next week

From an industry perspective, what TRMC have recommended to government and for this year’s Budget, and that we are seeking generally, include the following.

• That Government endorse and commit to a 100% Government buy Australian print and related services policy. As part of Australia’s economic reinvigoration out of the effects of COVID-19 we are calling upon all levels of government to implement clear policies that mandate the procurement of all print related products be from Australian made and manufactured products and sources. This recommendation would ensure up to $150m of government procurement spending is not offshored and support a local manufacturing directive.

• That Government support industry led awareness campaigns, such as Love Paper, promoting Australian manufacturing and employment in the largest manufacturing employment sector in the country – paper, print, mail and packaging. Our industry supports 258,000 direct and indirect jobs in an environmentally sustainable industry. Further, the products and services our industry provide a socially inclusive channel for aged, marginalised, remote and regional communities compared to the limitations on electronic delivery.

• That Government make the instant asset write-off and the temporary full expensing a permanent fixture for manufacturing businesses/industries. The introduction of the instant asset write-off and temporary full expensing has given our industry the opportunity to maintain or increase capital expenditure within their businesses and with less tax depreciation complexities than would otherwise be experienced. Government policies such as the instant asset write-off will ensure our industry, and particularly small businesses, remains competitive, profitable and sustainable through increased capital expenditure and with less tax depreciation complexities.

• That Government implement a freight subsidisation scheme or related measures to support supply and logistics from SE Asia, South Korea and Japan into Australia. Given the ongoing supply chain issues, particularly shipping delays, facing Australian businesses there is a strong case for government to develop and invest in a wider national sea freight subsidisation scheme that would support our industry and others to expeditiously import both raw and finished materials and goods.

• That Government partner with industry to build additional paper manufacturing infrastructure for expanded local capacity, and accommodation of the 2024 Waste Paper Export Ban. We are seeking Government commitment to, and partnering with, our industry to overcome these industry specific supply chain issues, and to develop commercial solutions for the waste export ban on paper and cardboard which is to commence on 1 July 2024.

• Current and future skills shortages need to be addressed. This includes making much needed improvements in the vocational training space.

• Hold fast on increasing government fees and charges, along with delaying any new or additional regulatory changes and burdens for business. Industry needs some breathing space and time to work on recovery and growth.

• Investing in Australian society, and therefore the overall economy, via gender responsive budgeting measures that brings about better outcomes for women and ongoing funding for purposeful and beneficial mental health programmes and services.

As a result of the unprecedented experiences of the last two years there is a significant amount of balancing to be undertaken in this year’s budget. Given the economic forecasts for the next few years, along with significant government debts incurred from managing COVID-19, we also want to see transparency on the governments longer term budget strategy. This includes needing to see a balanced approach to budget repair over the short to medium term.

Charles Watson, GM – IR, Policy and Governance, The Real Media Collective, 23 March 2022

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