BCA president Tim Reed said the group’s budget submission, to be released on Saturday, was about moving away from emergency measures to modernise the economy around low-carbon industry, digital services, open trade and more research.
“We don’t need just an investment hit for one year – we need a sustained lift in investment across the nation,” said Mr Reed, the former chief executive of services company MYOB.
“Doing something that’s temporary isn’t going to solve that long-term problem. We think it’s needed more now than ever, but it was needed before COVID as well.”
The allowance would work as an additional tax deduction for new investment and would reduce the final cost of buying new machinery, equipment or intangible assets.
The BCA has modelling from Ernst & Young forecasting a budget cost of about $10 billion a year, which would rise over time and encourage $200 billion in new investment over a decade, creating 500,000 jobs.
The proposal is more expensive than a more targeted scheme from Labor, which went to the last election forecasting a $3.9 billion cost over four years for its Australian Investment Guarantee.
Treasurer Josh Frydenberg has signalled his support for tax measures to spur investment in the October budget, as well as bringing forward personal income tax cuts.
BCA chief executive Jennifer Westacott said the budget had to be about economic “regeneration” and building confidence, with a focus on 1 million unemployed workers.
Ms Westacott said the nation should be aiming to create 1.5 million jobs in the recovery and changing the economy to achieve the productivity growth of about 2 per cent a year seen in the 1990s.
A return to the gains of the 1990s would add $2 trillion to gross domestic product over a decade and $500 billion in tax revenue to the federal government over a decade, the BCA estimates.
“Our point is that this budget has to be about jobs but we can’t imagine that the hard work of returning the economy to the next 30 years of uninterrupted growth stops at the October budget,” Ms Westacott said.
“The hard yards on skills, on comprehensive tax reform have to be done. We’re on a long-term reform journey here.”
The submission calls for a removal of state border controls unless they are needed in “extreme” circumstances and a six-month plan to remove international travel bans.
It recommends a permanent increase in the JobSeeker unemployment benefit from $565 a fortnight to at least $650 a fortnight, which is 75 per cent of the age pension.
The Greens want JobSeeker to stay at $1100 a fortnight, its temporary level including the coronavirus supplement, while the government is yet to reveal its stance on the permanent base rate. Labor wants a higher rate but has not named a figure.
The BCA supports an economy with net-zero emissions by 2050 but also wants states to remove bans on gas exploration and development.
While the government committed $2 billion to skills and training in May, the BCA wants bigger changes including “revitalising” the apprenticeships system, strengthening TAFE and improving careers guidance.
David Crowe is chief political correspondent for The Sydney Morning Herald and The Age.