The state’s peak business organisation, Business NSW, has acknowledged the Federal Government’s commitment to delivering on its commitments and putting fiscal repair at the heart of a Budget which forecasts a challenging outlook for businesses already grappling with labour shortages, higher prices and global disruption.

However, Business NSW warns a reasonable and proportionate Budget is at risk of being overshadowed by planned industrial relations changes due to hit federal parliament later this week.

Treasurer Jim Chalmers has announced a projected deficit of $36.9 billion for the 2022/23 financial year, an improvement of $41.1 billion coming off the back of high income tax receipts and high commodity prices.

“In a challenging economic environment, there is no doubt this Budget makes the hard decisions to kickoff the process of getting us back in the black,” said Business NSW Chief Executive Daniel Hunter.

“With inflation expecting to peak above 7% later this year before dropping to below 3.5% through next financial year, there is some light on the horizon but our members are still doing it tough. Businesses have been resilient and adapted, cutting overheads where possible and even in some cases passing on costs to loyal customers where it’s unavoidable.”

“With energy prices forecast to skyrocket next year, we welcome a $62.6 million Budget boost for an energy efficiency grants program and a commitment to establish a $20 billion fund for energy transmission.

 "In a challenging economic environment, there is no doubt this Budget makes the hard decisions to kickoff the process of getting us back in the black."

“We hope to see the $20 billion Rewiring the Nation fund for energy transmission delivering genuine savings to energy bills by shifting the costs of energy transition away from energy users.”

The Budget outlines expected economic growth this financial year of above 3%, before slowing to 1.5% next financial year, with unemployment expected to stay low by historical standards.

“More than 9 out 10 businesses have told us they are struggling with staff shortages, and it’s something we expect to remain in the short to medium term. This Budget locks in some of the key measures discussed at the recent Jobs Summit, with an increase to the permanent Migration Program from 160,000 to 195,000for this financial year, investing $42.2m to accelerate visa processing and 180,000 fee free TAFE places to be delivered next year.”

“Higher subsidies for more than 1.2 million eligible Australian families in early childhood education and care will see cost of living relief and is also expected to increase the paid hours worked by women with young children by up to 1.4 million hours a week. This is the equivalent of 37,000 extra full time workers and will be welcomed by families and businesses alike.”

“More than $530 million to extend paid parental leave will also increase participation and productivity, with families able to access up to 26 weeks of leave by 2026.”

A focus on housing supply and affordability in the Budget will be welcomed by businesses, with regional parts of NSW finding it hard to attract workers without enough housing.

“A New Housing Accord between government, investors and industry will see an initial $350 million invested in this Budget to kickstart the delivery of one million new homes across the country over five years from 2024. There is a lot of work to do to ensure all levels of government and the private sector are pulling the right levers to make this aspirational target a reality, but as an organisation we have always advocated for sensible reform when it comes to getting young people and families into their own home.”

“In the past few years natural disasters and the pandemic have presented a significant challenge for the mental health of our business operators. A $15.1m investment in this Budget to extend tailored small business mental health and financial counselling programs is an important and welcome measure.”

“Businesses will have one eye on this Budget but also on proposed industrial relations legislation that is proposed to be introduced to parliament this week. With such a challenging economic environment laid out in this Budget, the last thing businesses need is both the looming threat of industry-wide bargaining supported through crippling strike action and spiralling wage costs.

“We encourage the Government to sit down and consult with the business community about how the Government can achieve its goal of incentivising bargaining without resorting to regular strike action on an industry-wide basis.

“Business, unions and government need to work together to support genuine, democraticworkplace agreements and avoid job-killing industrial action from a bygone era.”

About Business NSW

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826.