Latest news with #DeloitteAccessEconomics
Perth Now
3 days ago
- Business
- Perth Now
One tax reform Australia desperately needs
Major reforms to the tax system are needed to stop living standards from falling, one leading economic firm has argued, amid forecasts Australia is tipped to recover from its anaemic growth over the past 12 months. While Australia's economic growth will pick up from 1.3 to 2.1 per cent, fresh forecasts from Deloitte Access Economics suggest increasing and broadening the GST in a bid to compensate lower income household and flatten personal income taxes. The current GST system is complex, with a number of exemptions already in place for things like basic foods, education courses, some medical health and care products and precious metals, among others. Deloitte Access Economics partner and co-author Cathryn Lee said these changes would importantly help the federal budget while growing the economy. 'That is, modelling demonstrates that tax reform can be positive for the economy, positive for the budget, and positive for Australian people,' she said. In its latest economic forecast, Deloitte says Australia needs to increase and broaden the GST. NewsWire / Nicholas Eagar Credit: NewsWire 'That is why the Treasurer's promise to approach reform ideas from a 'practical, pragmatic and problem‑solving middle ground' has the potential to be so significant.' Ms Lee said it has been encouraging that the government has used various speeches so far to discuss the importance of boosting productivity and changing tax reforms. CPA Australia chief of policy Elinor Kasapidis agrees as she previously told NewsWire Australia needs to modernise its tax system through lifting the rate on consumption. Otherwise, the country would a severe problem down the track. 'We have a lot of GST-free goods and exemptions which makes things tricky and complicated and then you need to look at raising the rate,' she said. CPA Australia chief of policy Elinor Kasapidis says Australia needs to change its GST now or risk a bigger problem down the track. Picture Supplied. Credit: Supplied 'Of course you also have to look at who would be impacted, such as lower income households and pensioners, to make sure they are compensated during the transition.' Deloitte Access Economics partner and report co-author Stephen Smith said Australia's last major tax reform was over a quarter of a century ago. 'Since then, the Australian economy has lost its dynamism and competitive edge,' Mr Smith said. 'Major sectors in the economy – such as banking, insurance, supermarkets, airlines, and communication services – are dominated by a very small number of very large firms, supported by an economic system that keeps barriers to entry high.' Mr Smith argues the results of this have seen slow productivity growth and real wages falling. 'In this context, it is no surprise that the proverbial pet shop galah is talking about the need for reform,' he said. Australia's economy as a whole is tipped to expand in 2026. NewsWire / Emma Brasier Credit: News Corp Australia Despite the pessimistic backdrop, Deloitte says the government's recent drubbing at the election, where the Labor Party won a record equalling 94 of the 150 House of Representatives seats, is paving way for significant reform. 'The Treasurer's speech at the National Press Club made clear that 'consensus support' for a policy change will be required,' Ms Lee said. 'Given almost every meaningful reform would inevitably create both winners and losers, achieving a consensus may prove an impossibly high bar. 'That would be a deep disappointment after the government has stoked anticipation for change.' Despite calling for tax reforms, Deloitte forecasts the economy will pick up, albeit from a relatively low base. GDP is tipped to come in at 1.3 per cent this financial year, before jumping to 2.1 per cent over the next 12-months. 'An important combination of lower inflation, declining interest rates, rising real wages, solid government spending growth and a robust labour market is expected to provide the basis for a gradual improvement in domestic economic fortunes in the near term,' Ms Lee said.
News.com.au
3 days ago
- Business
- News.com.au
Deloitte suggests increasing GST to stop living standards from dropping as Australia tipped to recover from anaemic growth
Major reforms to the tax system are needed to stop living standards from falling, one leading economic firm has argued, amid forecasts Australia is tipped to recover from its anaemic growth over the past 12 months. While Australia's economic growth will pick up from 1.3 to 2.1 per cent, fresh forecasts from Deloitte Access Economics suggest increasing and broadening the GST in a bid to compensate lower income household and flatten personal income taxes. The current GST system is complex, with a number of exemptions already in place for things like basic foods, education courses, some medical health and care products and precious metals, among others. Deloitte Access Economics partner and co-author Cathryn Lee said these changes would importantly help the federal budget while growing the economy. 'That is, modelling demonstrates that tax reform can be positive for the economy, positive for the budget, and positive for Australian people,' she said. 'That is why the Treasurer's promise to approach reform ideas from a 'practical, pragmatic and problemâ€'solving middle ground' has the potential to be so significant.' Ms Lee said it has been encouraging that the government has used various speeches so far to discuss the importance of boosting productivity and changing tax reforms. CPA Australia chief of policy Elinor Kasapidis agrees as she previously told NewsWire Australia needs to modernise its tax system through lifting the rate on consumption. Otherwise, the country would a severe problem down the track. 'We have a lot of GST-free goods and exemptions which makes things tricky and complicated and then you need to look at raising the rate,' she said. 'Of course you also have to look at who would be impacted, such as lower income households and pensioners, to make sure they are compensated during the transition.' Deloitte Access Economics partner and report co-author Stephen Smith said Australia's last major tax reform was over a quarter of a century ago. 'Since then, the Australian economy has lost its dynamism and competitive edge,' Mr Smith said. 'Major sectors in the economy – such as banking, insurance, supermarkets, airlines, and communication services – are dominated by a very small number of very large firms, supported by an economic system that keeps barriers to entry high.' Mr Smith argues the results of this have seen slow productivity growth and real wages falling. 'In this context, it is no surprise that the proverbial pet shop galah is talking about the need for reform,' he said. Despite the pessimistic backdrop, Deloitte says the government's recent drubbing at the election, where the Labor Party won a record equalling 94 of the 150 House of Representatives seats, is paving way for significant reform. 'The Treasurer's speech at the National Press Club made clear that 'consensus support' for a policy change will be required,' Ms Lee said. 'Given almost every meaningful reform would inevitably create both winners and losers, achieving a consensus may prove an impossibly high bar. 'That would be a deep disappointment after the government has stoked anticipation for change.' Despite calling for tax reforms, Deloitte forecasts the economy will pick up, albeit from a relatively low base. GDP is tipped to come in at 1.3 per cent this financial year, before jumping to 2.1 per cent over the next 12-months. 'An important combination of lower inflation, declining interest rates, rising real wages, solid government spending growth and a robust labour market is expected to provide the basis for a gradual improvement in domestic economic fortunes in the near term,' Ms Lee said.
Perth Now
3 days ago
- Business
- Perth Now
Better times ahead for economy, despite global woes
Australia's economy is tipped to strengthen over the next few years despite the uncertain global backdrop, but may stagnate without serious tax reforms. While Australia's economic growth hit speed bumps early in of 2025 from Cyclone Alfred, other weather events and a dip in government spending, Deloitte Access Economics is optimistic the pace of economic growth will accelerate over the coming quarters. "Conditions are improving," the economic services company said in a report released on Friday. "Real wages are grinding higher (even if it will be around 2030 before pre-pandemic purchasing power is restored), interest rates are declining, and inflation is no longer preying on consumers' wallets or their psyche." That suggests consumer spending will pick up, despite the jarring effects of Donald Trump's second US presidency and other global concerns weighing on confidence, the report states. Construction activity will also be a source of economic strength, with a significant lift in dwelling activity expected across 2026 as the industry works through a backlog of projects and reforms to regulations and zoning take effect. The quarterly report forecast Australia's gross domestic product would grow by 2.1 per cent in 2025/26 and 2.4 per cent the following year, up from the 1.4 per cent GDP growth in the year to March 2025. The forecast is roughly in line with estimates from the Reserve Bank, which predicted in May that Australia's GDP would grow by 2.2 per cent in 2025/26 and 2.2 per cent the following year. The Deloitte report forecasts the central bank will cut interest rates by a total of half a percentage point over the rest of 2025, and again in 2026. It predicts 2025 will be the nadir for the Aussie dollar, buying just an average of 63.60 US cents, from 66 US cents in 2024. But it forecasts the Aussie will buy an average of 64.70 US cents in 2026, 67.4 US cents in 2027 and 68.70 US cents in 2028. However, Deloitte Access Economics partner and report co-author Stephen Smith warned globalisation, financialisation and technology change that had permanently boosted Australian living standards were fading. Australia couldn't rely on the global economy to drive prosperity, he said. Mr Smith said one of the most significant levers to drive investment, productivity and efficiency was the tax system, which hadn't been reformed in a quarter-century. "Since then, the Australian economy has lost its dynamism and competitive edge," he said, adding it was encouraging the federal government had recently raised the topic of tax reform.
The Advertiser
31-05-2025
- Business
- The Advertiser
Newcastle Airport's transformation is a golden opportunity for region
Newcastle Airport has come a long way since commercial flights began operating out of a tin shed in 1948. It is not among the signature rural or remote airfields that provide limited, but essential, services for emergency, flight training, charter flights and industry. Newcastle Airport instead services a catchment of more than 1.1 million, connecting 1.2 million passengers a year to capital cities, regional centres and tourism hotspots. It directly supports more than 5700 local jobs and generates $1 billion in economic impact. With scale comes complexity and risk, and the airport has a corporate structure, board and a big balance sheet. The reporting that readers have seen provides insights into governance and risk management frameworks in action. As a government-owned asset, the airport also reports to councils under frameworks mandated by the Local Government Act. Aviation is one of the most regulated sectors in Australia, bringing heavy compliance and reporting obligations. Add requirements under the Corporations Act, Newcastle Airport is not a business that can avoid transparency and accountability: to shareholders, markets, regulators or the public. As the airport expands, so do the obligations, revenue and operational costs, requiring more ambitious investment to maintain standards and competitiveness. More flights to more destinations, more competition on airfares, more freight options for NSW suppliers, more jobs, and the option to avoid driving to Sydney or risk a domestic connection to another city for an international flight. Newcastle Airport is advanced in plans to be the airport we deserve, with investment in an international runway and terminal. This week, direct flights to Perth were announced, providing one-stop links to London and Europe. No different to strategies progressed by most major airports, the airport is investing in property development that diversifies services and income. A 2023 Deloitte Access Economics report shows employment and economic contribution from Australian airport precincts eclipsing that of core aviation activities. Even land owners near Newcastle Airport get the opportunity, as complementary development proposals are pursued. Air freight is also an economic driver, comprising 13 per cent of Australian exports. We expect the airport to review opportunities to build this, as they have in partnership with the Joint Organisation of Councils in the proposal for an air cargo terminal. The region has much more at stake in the success of the airport than just securing that coveted flight to Singapore or the US, made possible by airport upgrades. We are a $91 billion economy entering structural adjustment as the contribution of coal declines, with 55,000 jobs at risk over the next 15 years. These government figures are not modelled on demand for coal. They reflect the supply-side hard baked into our future, including dates for the closure of coal-fired power stations and planning approvals for mines. You can hear the urgency from Upper Hunter mayors as they join advocacy for investment in the airport as part of the solution. When developments in the airport precinct, international upgrades and a cargo terminal are realised, these collectively will replace more than 16 per cent of the predicted jobs deficit. This is not a game for our region. Real jobs, communities and economic security are at risk. The committee is advocating hard with government and business for focus and investment, including the airport, positioning the region as grown-up, unified, professional and a sure bet. But the expression of local politics on airport matters shows that narrower interests are at play. In an own goal for the Hunter, this has bled into federal politics, with the Opposition threatening to air the matter in Senate Estimates. This is damaging negotiations on airport deals to secure the partnerships we need. The entire region, not just Newcastle, has an interest in the success of the airport. With the new terminal opening within months, now is the time to back-in one of the region's most important economic engines. Efforts should be focused on how to increase the feasibility of this generational opportunity and maximise benefits for Hunter residents, businesses and the economy. Newcastle Airport has come a long way since commercial flights began operating out of a tin shed in 1948. It is not among the signature rural or remote airfields that provide limited, but essential, services for emergency, flight training, charter flights and industry. Newcastle Airport instead services a catchment of more than 1.1 million, connecting 1.2 million passengers a year to capital cities, regional centres and tourism hotspots. It directly supports more than 5700 local jobs and generates $1 billion in economic impact. With scale comes complexity and risk, and the airport has a corporate structure, board and a big balance sheet. The reporting that readers have seen provides insights into governance and risk management frameworks in action. As a government-owned asset, the airport also reports to councils under frameworks mandated by the Local Government Act. Aviation is one of the most regulated sectors in Australia, bringing heavy compliance and reporting obligations. Add requirements under the Corporations Act, Newcastle Airport is not a business that can avoid transparency and accountability: to shareholders, markets, regulators or the public. As the airport expands, so do the obligations, revenue and operational costs, requiring more ambitious investment to maintain standards and competitiveness. More flights to more destinations, more competition on airfares, more freight options for NSW suppliers, more jobs, and the option to avoid driving to Sydney or risk a domestic connection to another city for an international flight. Newcastle Airport is advanced in plans to be the airport we deserve, with investment in an international runway and terminal. This week, direct flights to Perth were announced, providing one-stop links to London and Europe. No different to strategies progressed by most major airports, the airport is investing in property development that diversifies services and income. A 2023 Deloitte Access Economics report shows employment and economic contribution from Australian airport precincts eclipsing that of core aviation activities. Even land owners near Newcastle Airport get the opportunity, as complementary development proposals are pursued. Air freight is also an economic driver, comprising 13 per cent of Australian exports. We expect the airport to review opportunities to build this, as they have in partnership with the Joint Organisation of Councils in the proposal for an air cargo terminal. The region has much more at stake in the success of the airport than just securing that coveted flight to Singapore or the US, made possible by airport upgrades. We are a $91 billion economy entering structural adjustment as the contribution of coal declines, with 55,000 jobs at risk over the next 15 years. These government figures are not modelled on demand for coal. They reflect the supply-side hard baked into our future, including dates for the closure of coal-fired power stations and planning approvals for mines. You can hear the urgency from Upper Hunter mayors as they join advocacy for investment in the airport as part of the solution. When developments in the airport precinct, international upgrades and a cargo terminal are realised, these collectively will replace more than 16 per cent of the predicted jobs deficit. This is not a game for our region. Real jobs, communities and economic security are at risk. The committee is advocating hard with government and business for focus and investment, including the airport, positioning the region as grown-up, unified, professional and a sure bet. But the expression of local politics on airport matters shows that narrower interests are at play. In an own goal for the Hunter, this has bled into federal politics, with the Opposition threatening to air the matter in Senate Estimates. This is damaging negotiations on airport deals to secure the partnerships we need. The entire region, not just Newcastle, has an interest in the success of the airport. With the new terminal opening within months, now is the time to back-in one of the region's most important economic engines. Efforts should be focused on how to increase the feasibility of this generational opportunity and maximise benefits for Hunter residents, businesses and the economy. Newcastle Airport has come a long way since commercial flights began operating out of a tin shed in 1948. It is not among the signature rural or remote airfields that provide limited, but essential, services for emergency, flight training, charter flights and industry. Newcastle Airport instead services a catchment of more than 1.1 million, connecting 1.2 million passengers a year to capital cities, regional centres and tourism hotspots. It directly supports more than 5700 local jobs and generates $1 billion in economic impact. With scale comes complexity and risk, and the airport has a corporate structure, board and a big balance sheet. The reporting that readers have seen provides insights into governance and risk management frameworks in action. As a government-owned asset, the airport also reports to councils under frameworks mandated by the Local Government Act. Aviation is one of the most regulated sectors in Australia, bringing heavy compliance and reporting obligations. Add requirements under the Corporations Act, Newcastle Airport is not a business that can avoid transparency and accountability: to shareholders, markets, regulators or the public. As the airport expands, so do the obligations, revenue and operational costs, requiring more ambitious investment to maintain standards and competitiveness. More flights to more destinations, more competition on airfares, more freight options for NSW suppliers, more jobs, and the option to avoid driving to Sydney or risk a domestic connection to another city for an international flight. Newcastle Airport is advanced in plans to be the airport we deserve, with investment in an international runway and terminal. This week, direct flights to Perth were announced, providing one-stop links to London and Europe. No different to strategies progressed by most major airports, the airport is investing in property development that diversifies services and income. A 2023 Deloitte Access Economics report shows employment and economic contribution from Australian airport precincts eclipsing that of core aviation activities. Even land owners near Newcastle Airport get the opportunity, as complementary development proposals are pursued. Air freight is also an economic driver, comprising 13 per cent of Australian exports. We expect the airport to review opportunities to build this, as they have in partnership with the Joint Organisation of Councils in the proposal for an air cargo terminal. The region has much more at stake in the success of the airport than just securing that coveted flight to Singapore or the US, made possible by airport upgrades. We are a $91 billion economy entering structural adjustment as the contribution of coal declines, with 55,000 jobs at risk over the next 15 years. These government figures are not modelled on demand for coal. They reflect the supply-side hard baked into our future, including dates for the closure of coal-fired power stations and planning approvals for mines. You can hear the urgency from Upper Hunter mayors as they join advocacy for investment in the airport as part of the solution. When developments in the airport precinct, international upgrades and a cargo terminal are realised, these collectively will replace more than 16 per cent of the predicted jobs deficit. This is not a game for our region. Real jobs, communities and economic security are at risk. The committee is advocating hard with government and business for focus and investment, including the airport, positioning the region as grown-up, unified, professional and a sure bet. But the expression of local politics on airport matters shows that narrower interests are at play. In an own goal for the Hunter, this has bled into federal politics, with the Opposition threatening to air the matter in Senate Estimates. This is damaging negotiations on airport deals to secure the partnerships we need. The entire region, not just Newcastle, has an interest in the success of the airport. With the new terminal opening within months, now is the time to back-in one of the region's most important economic engines. Efforts should be focused on how to increase the feasibility of this generational opportunity and maximise benefits for Hunter residents, businesses and the economy. Newcastle Airport has come a long way since commercial flights began operating out of a tin shed in 1948. It is not among the signature rural or remote airfields that provide limited, but essential, services for emergency, flight training, charter flights and industry. Newcastle Airport instead services a catchment of more than 1.1 million, connecting 1.2 million passengers a year to capital cities, regional centres and tourism hotspots. It directly supports more than 5700 local jobs and generates $1 billion in economic impact. With scale comes complexity and risk, and the airport has a corporate structure, board and a big balance sheet. The reporting that readers have seen provides insights into governance and risk management frameworks in action. As a government-owned asset, the airport also reports to councils under frameworks mandated by the Local Government Act. Aviation is one of the most regulated sectors in Australia, bringing heavy compliance and reporting obligations. Add requirements under the Corporations Act, Newcastle Airport is not a business that can avoid transparency and accountability: to shareholders, markets, regulators or the public. As the airport expands, so do the obligations, revenue and operational costs, requiring more ambitious investment to maintain standards and competitiveness. More flights to more destinations, more competition on airfares, more freight options for NSW suppliers, more jobs, and the option to avoid driving to Sydney or risk a domestic connection to another city for an international flight. Newcastle Airport is advanced in plans to be the airport we deserve, with investment in an international runway and terminal. This week, direct flights to Perth were announced, providing one-stop links to London and Europe. No different to strategies progressed by most major airports, the airport is investing in property development that diversifies services and income. A 2023 Deloitte Access Economics report shows employment and economic contribution from Australian airport precincts eclipsing that of core aviation activities. Even land owners near Newcastle Airport get the opportunity, as complementary development proposals are pursued. Air freight is also an economic driver, comprising 13 per cent of Australian exports. We expect the airport to review opportunities to build this, as they have in partnership with the Joint Organisation of Councils in the proposal for an air cargo terminal. The region has much more at stake in the success of the airport than just securing that coveted flight to Singapore or the US, made possible by airport upgrades. We are a $91 billion economy entering structural adjustment as the contribution of coal declines, with 55,000 jobs at risk over the next 15 years. These government figures are not modelled on demand for coal. They reflect the supply-side hard baked into our future, including dates for the closure of coal-fired power stations and planning approvals for mines. You can hear the urgency from Upper Hunter mayors as they join advocacy for investment in the airport as part of the solution. When developments in the airport precinct, international upgrades and a cargo terminal are realised, these collectively will replace more than 16 per cent of the predicted jobs deficit. This is not a game for our region. Real jobs, communities and economic security are at risk. The committee is advocating hard with government and business for focus and investment, including the airport, positioning the region as grown-up, unified, professional and a sure bet. But the expression of local politics on airport matters shows that narrower interests are at play. In an own goal for the Hunter, this has bled into federal politics, with the Opposition threatening to air the matter in Senate Estimates. This is damaging negotiations on airport deals to secure the partnerships we need. The entire region, not just Newcastle, has an interest in the success of the airport. With the new terminal opening within months, now is the time to back-in one of the region's most important economic engines. Efforts should be focused on how to increase the feasibility of this generational opportunity and maximise benefits for Hunter residents, businesses and the economy.
West Australian
26-05-2025
- Business
- West Australian
AI in sights to build up nation's sliding productivity
Beneath its robust facade, deep-seated cracks threaten the integrity of Australia's jobs market. Wages are growing in real terms, unemployment is historically low and falling interest rates bode well for further jobs growth. But employment growth has been lumpy, with investment in government-reliant industries such as health and childcare masking weakness in the market sector, says Deloitte Access Economics partner David Rumbens. As growth in public spending and immigration trend downwards, the pace of job creation will slow from 2.7 per cent to 2.3 per cent in 2024/25 and 1.5 per cent the year after, Deloitte's latest quarterly Employment Forecasts report found. The good news is wages growth remains strong and Australia's economy looks to be on the way up, despite uncertainty caused by Donald Trump's trade war. "All sectors are expected to benefit from the gradual economic upturn, with consumer-facing industries poised for growth due to the combined effects of tax cuts, government rebates and anticipated cuts to interest rates," said Mr Rumbens, the report's lead author. But Australia's abysmal productivity performance threatens to limit workers' dividends. "The sustainable way to maintain healthy wage growth is through productivity gains - something the treasurer has recently nominated as being central to the Labor government's second term," Mr Rumbens said. Since March 2022, labour productivity - the output produced by a worker over a given amount of time - has fallen by 5.7 per cent. Treasurer Jim Chalmers has said while the first term was focused primarily on getting inflation down and improving productivity second, reigniting productivity growth would be the main economic focus of the next three years. To that end, the Productivity Commission will conduct inquiries into 15 reform areas, including finding a way to harness generative artificial intelligence. As well as making workers more efficient, Deloitte Human Capital Partner Sarah Rogers said AI could free up employees to perform higher quality or new work, enhancing a job's desirability. "For example, the role of AI for professionals is enormous," she said. "There are large opportunities for automating or augmenting routine tasks and creating worker efficiencies across many occupations." Productivity outcomes have been particularly dismal in the construction industry, compounding the challenge of increasing dwelling supply to make housing more affordable. A report by the Committee for Economic Development of Australia found the dominance of very small businesses, inefficient tax settings and overly-complex land regulation was dragging the industry's productivity down. As a result, Australia is building half as many homes per construction worker today as in the 1970s, said the committee's chief economist Cassandra Winzar. To fix it, Australia should encourage building companies to move away from the dominant sub-contracting model and grow in size. "Smaller firms are less productive than bigger firms because they can't achieve the same productivity gains from innovation, investment and economies of scale," Ms Winzar said. Stream-lining planning and zoning laws across all levels of government and expanding national licensing for trades such as electricians would remove barriers for firms to expand interstate, the report found. The government should also reform the tax system to remove disincentives for sole traders from joining a business, with self-employed workers paying less tax than salaried employees.
