Treasurer says budget includes more for education and training

The Albanese government says it will make further investments in higher education and training in Tuesday's federal budget to ensure Australia has the workforce to attract the massive influx of capital needed to turn the economy around.

The budget will show the nation is forecast to receive its longest annual sustained increase of business investment since the 2000s mining boom, for six consecutive years, to hit $305.7 billion in 2025-26. But much more will be needed to drive the productivity gains the government is pursuing.

"If we get the investment flows right, we can boost productivity in our economy, we can lift living standards, and we can create secure, well-paid jobs and these are our motivations," Treasurer Jim Chalmers said in an interview with The Canberra Times.

"We recognize that if we want our economy to be more productive and dynamic, if we want to get better at adapting and adopting technology, we need this human capital base."

Addressing skilled labour shortages would be "very big focus" in Tuesday's federal budget, Dr Chalmers said, as the Treasury analysis reveals billions of dollars in additional investment are needed to make the government's renewable energy aspirations viable as it backs natural gas beyond 2050.

"There is much more in the budget about broadening and deepening our reserves of human capital," he said in the interview.

Dr Chalmers said the budget would include further reforms to the university sector, responding to the Universities Accord, after the government announced 20,000 new free TAFE places and changes to how HECS fees are indexed.

The Accord's final report, which recommended the student debt relief, also called for the tertiary education attainment rate to be lifted from 60 per cent to 80 per cent of working Australians by 2050; and for the proportion of 25-to-34-year olds who are university educated to rise from 45 to 55 per cent by the same date.

Former Treasury secretary Ken Henry told the ABC on Wednesday the economy was "on a knife edge" and that there was only a limited amount of labour available to businesses, as the government rolls out its Future Made in Australia and renewable energy plans.

Dr Chalmers said productivity growth had been too slow for too long and that "our living standards depend on doing better".

The influx of capital in the forecast would be driven by substantial investment in non-mining sectors, including the construction industry, which would hit $137.3 billion in 2024-25.

Real new business investment grew 8.3 per cent in 2022-23 and is forecast to grow 5.5 per cent in 2023-24, one per cent in 2024-25 and two per cent in 2025-26.

Dr Chalmers said tax changes in the budget would also be focused on "incentivising private investment".

He said migration would have a role to play in building the skilled workforce, but this would be balanced with the need to keep a lid on net overseas migration, which can be inflationary.

"There is a bigger focus on training and educating Australians for these opportunities, but not a sole focus," he said.

In a statement, the Treasurer said investment would be key to the success of a nation that "desperately needs to grow over the longer term".

"Our budget is all about building a stronger and more resilient economy [as] we fight inflation and ease pressure on our people ... Public investment is only part of the story."