Treasurer Josh Frydenberg will prioritise investments that support economic growth and job creation in the budget later this month, warning that the nation’s economic recovery is “not yet locked in” due to potential downside risks.
Following the release of the national accounts on Wednesday, Mr Frydenberg said that Russia’s invasion of Ukraine and the COVID-19 pandemic were among the main risks to Australia’s ongoing recovery that had been “very strong” to date.
To help keep the recovery on track, the Treasurer said that employment would remain a key focus in the budget this year with investment across a number of areas.
“We are working to a very clear fiscal strategy which has been to drive unemployment down, and now we are on the verge of full employment,” Mr Frydenberg said.
“We have an unemployment rate that the RBA is forecasting to have a three [3] in front of it before year’s end, so we will continue to invest in those areas in the budget which help create jobs.”
Greater investment in skills has been flagged after earlier funding saw the number of trade apprenticeships across the country reach a record 220,000 in 2021.
Infrastructure, manufacturing and the digital economy were all earmarked by the Treasurer as priority areas for investment.
Mr Frydenberg suggested that regional areas would be critical to the economic growth of the country moving forward and would receive a “very significant investment” as a result.
The government will seek to introduce incentives to help boost business investment which spiked significantly during the pandemic as a result of the introduction of immediate expensing and loss carry‑back provisions.
Energy investment will also remain on the government’s radar during this year’s budget.
“We have invested significantly in that transition we are seeing across the energy space, which is trying to simultaneously reduce our carbon footprint, boost the economy, and reduce the price of electricity as well as increase its reliability off the grid,” said Mr Frydenberg.
In light of the conflict between Russia and Ukraine, the Treasurer also drew attention to the government’s investment in international security and said that spending on defence had risen to above 2 per cent of GDP from a low of 1.5 per cent when the government took office.
“We have outlined a very significant defence project pipeline and we will continue to build on that pipeline,” the Treasurer said.
“We will continue to invest heavily in national security. I think that's one of the key features of our response ... ever since we’ve come to government, and we will continue to build on that in the budget.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
