“The Mid-Year Economic and Fiscal Outlook (MYEFO) released today provides further evidence of the resilience of the Australian economy in the face of the COVID-19 crisis. However, it also highlights some key vulnerabilities that should attract substantial policy proposals from across the political spectrum as we head into the election next year,” Innes Willox, Chief Executive of the national employer association Ai Group, said today.
“While surrounded by an elevated level of uncertainty, the outlook put forward in MYEFO is for a strong rebound in the economy following the Delta-related setback in the September quarter. The strength of the rebound was evident in today’s ABS Labour Force data which suggest the labour market recovery could be faster than anticipated in MYEFO. While positive, this will also add to businesses’ concerns about skills shortages and the need to more rapidly return to pre-COVID levels of migration and particularly of skilled migration.
“Despite the interruptions associated with the Delta outbreak, the federal budget aggregates are not much changed from those in the May Budget. While that is good news for the immediate outlook, considering that it could have been much worse, the persistence of large structural deficits remains of concern and reinforces the importance of policies to address well-entrenched flaws in our tax systems.
“Another area of fundamental concern is the expectation of continued low real wages growth. This highlights the importance of policies to encourage higher rates of productivity growth in areas such as skills development, innovation and the further recovery of business investment,” Mr Willox said.
