If you can believe opinion polls, manufacturers can look forward to a bright new year.
Recent surveys have revealed a post-election rebound in business confidence and a positive outlook for the national economy over the next 12 months.
Manufacturers have every reason to be optimistic, with the new government firmly on track to deliver its “pro-business” pre-election commitments.
This includes reducing red and green tape, abolishing the carbon tax and reversing Labor’s FBT changes to motor vehicles.
The parliamentary secretary to the Prime Minister, Josh Frydenberg has wasted no time in meeting with key business and industry groups to investigate ways of slashing red and green tape.
This is a most encouraging sign.
Frydenberg has been charged with reducing red and green tape administration costs by $1 billion per year nationally – an ambitious task to say the least.
Deregulation is expected to be a critical part of the new government’s economic policy challenge.
Frydenberg has been quoted as saying: “one of the most effective ways to boost productivity is via the micro-economic reform agenda of deregulation.”
“It is an area where Labor failed and the Coalition must succeed,” he said.
While regulation is necessary in an economy, excessive red tape can reduce productivity and impede business growth.
This can result in reduced profits and fewer jobs. Apart from complex taxation obligations, businesses must also comply with health and safety, employment, planning and other industry regulations.
Given past experiences, there is good cause to be wary of a new Government promising to reduce red and green tape.
To allay those fears, the government should provide a comprehensive plan of how it intends to achieve its goals. Such a plan would be of great benefit to SMEs and would help them plan for potential changes.
Meanwhile, we look forward to the year ahead.
From the team at Industry Update we wish you a very happy Christmas and a prosperous New Year.