Banking CEOs have applauded the budget, saying it will boost business investment and help build confidence in the economy.
Banking CEOs have applauded the budget, saying it will boost business investment and help build confidence in the economy.

‘Very positive’: Bank bosses back budget

Commonwealth Bank boss Matt Comyn has joined several of his peers in applauding this year's federal budget, as he labelled it a comprehensive plan that is "highly supportive" of Australian businesses.

Mr Comyn said additional stimulus handed down in Tuesday's budget, alongside a focus on job creation and an extension of incentives for businesses to continue to invest, would lead to an accelerated economic recovery from the COVID-19 turmoil.

"It's very positive for the Australian economy, it adds to our optimism about the outlook and growth prospects," he said.

Mr Comyn said CBA's estimates for business investment and lending growth and economic output were, though, tracking ahead of the budget forecasts.

"We will see a pick up in business investment, which we think is critical. There was a lot in it, from aged (care), health, obviously NDIS, and support for essential services and a number of key areas that they've tried to address around childcare etc".

Mr Comyn said the budget's spending measures and an extension of business investment incentives were "very comprehensive" and would be well received by small and businesses.

"One of the key economic measures overall will be the increase in business investment, so therefore on the extension around the investment incentives which are widely understood and very well received... will be in particular very positive.

"To see that pick up in productive investment activity across small and mid-sized businesses which I think is absolutely essential to the ongoing economic recovery."

Under the scheme, businesses with less than $5bn in annual turnover will be able to deduct the full cost of eligible assets, including the cost of improving existing assets, between October 2020 and end-June 2023. That includes machinery, equipment and other investments.

That measure and loss carry-back provisions - which allow businesses to recoup tax paid on prior year results - amount to expenditure of $20.7bn over four years.

On whether the federal government missed the opportunity to drive structural reform in the budget, Mr Comyn said those changes tended to be "very hard" and the near-term focus was on ensuring growth in economic output was maintained.

National Australia Bank's chief executive Ross McEwan was also positive on measures in the budget, including the extension of business investment incentives.

"The most recent NAB Monthly Business Survey shows business conditions and confidence at record-highs and confirms that for most of the economy, we have shifted from recovery to growth," he said.

"This budget builds on that momentum and will help deliver an increase in business investment and job creation.

"The government has managed health and economic impacts well and it is right to continue providing stimulus to businesses and the broader economy, with a focus on achieving unemployment below five per cent."

Mr McEwan also welcomed the federal government allocating $1.2bn to its digital economy strategy, which includes helping small and medium businesses build digital capacity and facilitates more businesses adopting e-invoicing.

Westpac CEO Peter King highlighted the budget's focus on creating jobs creation and driving economic growth.

"The additional spending on infrastructure will be a key economic and employment driver and the banking sector will play a vital part in facilitating these projects," he said.

"It's particularly pleasing to see ongoing support for the tourism sector, and for business more broadly, the extension of temporary full expensing and loss carry-back rules into 2023 will provide welcome relief for the vast majority of businesses that will benefit."

Originally published as 'Very positive': bank bosses back budget