Shadow Treasurer Chris Bowen has pledged that a future Shorten Labor government will prioritise tax relief for Australian businesses and invest in digital skills as part of its wider economic reforms to lift the country’s productivity levels.
“Far from shirking the task of increasing national productivity, a Shorten Labor government will embrace it by improving the quality of our human and physical capital, encouraging technological innovation and making a city work better, and engaging in a world particularly with our region,” he said on Friday.
Mr Bowen’s keynote speech at the Committee for Economic Development of Australia in Sydney outlined a glimpse into what Australia can expect if Labor was voted into Parliament at the next federal election in May.
According to Mr Bowen, with investment at the core of Labor’s productivity plan, the future Labor government will invest in a 20 percent upfront depreciation guarantee that would apply to businesses that invest in not only traditional physical assets but also new intangible knowledge-based assets.
“We will provide tax relief to businesses on the condition of investment. Companies small, medium and large making new investments will be able to immediately deduct 20 percent of the cost in the first year, over and above the existing depreciation schedule. The current government doesn’t support that, so that’s a key difference going into the election,” he said.
“The 20 percent deduction will not just apply to traditional investments like machinery and equipment, but also to the depreciation of increasingly important intangible investments including patents, intellectual property, upgrading computer software – all supported under investment guarantee.
“Supporting intangibles is increasingly important because of the rise of the digital economy and e-commerce which are less physical capital intensive and more human capital intensive. It’s something we should all care about because we are currently a laggard in OECD terms when it comes to digital innovation.”
Investing in “foundational skills” of the future is another area that Mr Bowen has promised the Shorten government will turn its attention to. He announced that the future government will provide universal access to preschool for every three- and four-year-old – a change to the current government policy, which is only applicable for four-year-old children.
“In a rapidly changing jobs market, skills that allow young people to have complex careers across a range of industries and professions is of course becoming increasingly important,” he said.
“Problem solving, financial literacy, digital literacy, team work and communications are different from the technical skills in which our education system currently concentrates.”
Mr Bowen also spoke of how Australia’s so-called Asia capabilities need to be taught much earlier in life, claiming as a country “our performance is lamentable”.
To address the issue, he said the Shorten government plans to introduce a future Asia framework that features a string of policies including launching a nationwide Asia capability schools program to educate schools about the economic importance of being Asia-ready; establishing an advisory council on Asia capabilities that will advise on ways to boost teaching and learnings about Asia across the education system; offering scholarships to students to become Asian language teachers; and investing an extra $8 million in community language schools.
“This is a big cruise ship to turnaround, but we’re committed. As Treasurer I will annually provide Parliament progress updates, so government has an accountability mechanism to be held to if we’re not making enough progress,” he said.