29 Jan 2021

2021–22 Federal Budget — an opportunity to target long-term jobs and investment

The ongoing COVID-19 pandemic has had world-changing economic impacts, and Australia has not been immune.

Australia entered its first recession in more than 30 years in June last year, halting more than three decades of continuous growth. The swift actions of the Australian Government in response to this economic emergency expedited national recovery, with several short-term measures in the 2020–21 Federal Budget — such as temporary full expensing and loss carry back measures — helping to guide Australia back to a pathway for growth by the end of 2020.

The successful use of these measures as seen in the 2020–21 Budget has provided much-needed impetus and provides the base for the Government’s Economic Recovery Plan. As they are designed though, short-term, or temporary measures will only provide short-term or temporary relief. Longer-term measures will be needed to lock back in growth and deliver Australia back to that growth trajectory.

Household spending is a current focus for driving economic recovery — and understandably so — but this spending cannot be relied upon without the job security to back it up. Substantial investment by business in capital-intensive investment of the kind seen in resources and infrastructure industry can help provide the jobs needed to deliver this long-term objective. And that is why this year’s Federal Budget is so important. As the country transitions from economic recovery to economic growth, the opportunity for the Budget is to target the long-term business investment that will ensure long-term job creation and economic growth.

The Australian oil and gas industry is ready and committed to supporting the next phase of the Government’s economic recovery plan. A 2020 EY report commissioned by APPEA, Australia’s Oil and Gas Industry: Kickstarting Recovery from COVID-19, found that with the right investment settings in place, the oil and gas sector could provide a $350 billion boost to the economy and more than 220,000 jobs over the next two decades.

Capital-intensive projects of the kind seen in major resources and infrastructure industries — such as mining, construction, and oil and gas — can often take upwards of six years to complete once an investment decision is taken. In addition, the creation of new roles required for these projects takes place from a project’s inception.

The length and complexity of these projects can ensure well-paid positions with continued job security and help boost the household spending that drives continued recovery in turn. On 1 February, APPEA will deliver five reform recommendations to the Australian Government in its capacity as the premier industry association for the Australian oil and gas industry. We believe these reforms will help to deliver the means for a boost to major infrastructure projects create jobs and sure Australia’s future for decades to come.