The federal budget, billed as the most important since the Great Depression for its need to stimulate growth and create jobs during COVID-19, has been described as a reasonable effort that will help the Illawarra economy and get more people into work.
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University of Wollongong Professor of Economics and Deputy Vice-Chancellor (Global Strategy) Alex Frino said there was nothing specifically targeting the Illawarra in the budget but the region will benefit from around $200 million from tax breaks, JobMaker and lump sum payments to pensioners.
"I think the biggest contribution to the region will come from the tax breaks. I think that is going to benefit about 100,000 Illawarra residents and will be worth around $100 to $125 million to the region," he said.
"It is a very significant contribution which will be important. It is a step in the right direction because it increases people's disposable income and we can expect them to spend at least half of that."
Prof Frino said the JobMaker hiring credit sounded good.
"The number of individuals we have that could quality for it, aged between 16 and 35, is about 7500 people. And if all of those found themselves in employment over the next 12 months that could be worth $60 million to the region," he said.
"And the lump sum to pensioners is also good. There are about 23,000 pensioners in the Illawarra region. With each receiving $500 each, that is an $11.5 million additional flow to the region."
Prof Frino said by his estimation the total injection the Illawarra economy can expect to gain from the 2020/21 budget is around $400 million which represents about 2.0 per cent of GRP (Gross Regional Product).
That includes almost $200 million from the JobSeeker payment extension and $125 million from personal income tax cuts.
"That's the largest flow I can ever recall seeing to the Illawarra region from any budget," Prof Frino said.
Prof Frino said there was also a little bit in the budget for higher education and research and development.
But there was nothing specifically for the region.
"Our biggest problem is structural unemployment and there is nothing in this that it targeting the type of heavy industrial manufacturing that we do. And our construction industry is on the verge of collapse," he said.
"Building approvals for the year to date are down around 30 per cent, which means our third biggest employer is being hit hard."
llawarra Business Chamber executive director Adam Zarth had wanted to see measures to support the region's economy and believes there was enough in it to boost business confidence and encourage them to trade, employ and invest.
Mr Zarth said it was good to see business right at the centre of the budget.
"The Treasurer has made it clear we are going to fight our way out of this by employing people, keeping them in jobs and growing business, particularly manufacturing," he said.
"What is important to me has been JobMaker. It is a fantastic initiative to provide hiring credits for 12 months to give incentives for businesses to put on additional staff.
"It is $200 a week for people under 30 and $100 a week for employees between 30 and 35."
Mr Zarth said income tax cuts, wage subsidies for apprentices, and support for key manufacturing sectors were all encouraging news as was funding for Booderee National Park, regional tourism, and shovel-ready council projects.
However, he was disappointed there was not a lot in the way of funding for infrastructure projects for the region.
He said he also wanted to find out more about a new round of the Building Better Regions Fund and the eligibility criteria.
But Mr Zarth said the budget does contain measures that will give Illawarra business confidence to invest in staff, equipment and themselves.
"At our urging, the government has committed to continue fiscal support until unemployment is back down to 6.0 percent, and the budget contains welcome initiatives to subsidise the employment of apprentices and new staff.
"The announcement of temporary full expensing sees a major expansion to the instant asset write-off scheme, allowing any business with turnover up to $5 billion to deduct the full cost of eligible depreciable assets which will incentivise investment and in turn generate economic activity."
"Businesses will also indirectly benefit from personal income tax cuts which will be brought forward to deliver $17.8 billion in additional tax relief for households.
"These tax cuts will be backdated and will boost disposable incomes by $1,080 for incomes above $45,000 and $2,565 for incomes above $120,000."
"The announcement of increased federal infrastructure spending is a welcome stimulatory measure but it's disappointing there are no projects listed in the broader Illawarra region, the Shoalhaven or the South Coast."
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