The Business Council says the 2025 Federal Budget should have done much more to drive private sector growth, while taking some positive action to improve productivity, grow a skilled workforce and strengthen education standards.
The BCA is concerned by the forecast for persistent deficits and an increase in inflation next year to three per cent, providing little fiscal buffer in uncertain global times.
BCA Chief Executive Bran Black welcomed personal income tax cuts and the improved economic outlook, though called on all sides of politics to undertake substantial economic reform to drive private sector growth.
"The Budget forecasts slightly better days ahead for economic growth with GDP increasing to 2.25 per cent next year, which is welcome, however we have not seen the policies or reform to drive investment and business-led growth now or for the years ahead," Mr Black said.
"Personal income and company taxes make up around two thirds of the Budget revenue and we welcome more relief to taxpayers, however we need a long-term solution for bracket creep.
"Across the Budget we still have significant spending with a projected deficit of $42.1 billion, not returning to balance for a decade, showing we are living beyond our means.
"Spending as a share of GDP is 27 per cent this coming year, which is the highest outside the pandemic, since 1985-86."
Highlighting the importance of economic reform to support businesses, the Budget outlined company and personal tax revenues of around $500 billion in 2025-26, underwriting the increase in spending for services.
"We need to nurture and grow our private sector more proactively because it's ultimately businesses which generate economic growth and prosperity to raise the living standards of every Australian.
"That means both the Government and the Opposition must address the economic fundamentals that drive productivity, such as regulation, planning and industrial relations, and also look at a broad-based investment allowance."
The following quotes are attributed to BCA Chief Executive Bran Black
National Productivity Fund
"The BCA called for the creation of the National Productivity Fund, and we strongly support it to incentivise state and territories to undertake economic reform, including the recent announcement to streamline electrical trade licences.
"We will continue to advocate for this Fund to be given more support to take on more state reform to boost productivity, which will help drive real wage growth and GDP."
Skills, apprentices and education
"We welcome the increase in funding for the new schools agreement and particularly support the reform for explicit instruction, year one phonics testing and more school counsellors, as called for in the BCA's Big Five Questions election platform.
"Getting more tradies into our workforce is critical to building more homes and we have long called for more incentives to address the housing crisis, and so we support the $10,000 incentive for building apprentices.
"As businesses are the engine room for training new apprentices, it's critical that the Government and Opposition work with industry to address the increasing cost of training tradies."
Fiscal and inflation concerns
"On both debt and deficit, Australia's public metrics compare well globally, although we are deteriorating and that is concerning given so much global uncertainty.
"Spending has increased too quickly, and it has been baked into permanent programs, while our luck of banking the receipts from record high commodity prices is coming to an end.
"At $27.6 billion, the predicted budget deficit for the year ended June 2025 represents a $43 billion deterioration from the budget of just a year ago.
"The BCA has called for a tax-to-GDP cap of 23.9 per cent and a two per cent annual cap on spending measures to ensure public spending is sustainable, does not contribute to inflation and does not exacerbate cost-of-living pressures.
"Although these weren't taken up in the Budget, it is clear fiscal rules are needed for budget repair given the decade of deficits ahead of us, to ensure future generations are not burdened with higher taxes and lower living standards."
