‘Muddling through’ Budget leaves employers cold

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‘Muddling through’ Budget leaves employers cold

Neither employers nor unions have responded to last night’s federal Budget with much enthusiasm, with most seeing it as avoiding the major issues facing the economy.

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Neither employers nor unions have responded to last night’s federal Budget with much enthusiasm, with most seeing it as avoiding the major issues facing the economy.

The Business Council of Australia (BCA), which represents the major corporations, described its goal as ‘muddling through’ with an approach that hasn’t worked so far expected to work now.

Chief Executive Jennifer Westacott said the projected return to surplus in 2015–16 is no more deliverable than last year’s promise.

‘The budget does not deliver on the government’s previous fiscal commitments and makes plain how much effort and leadership will be needed in future to get fiscal policy in Australia back on a sustainable footing,’ she said.

‘Far from delivering a budget surplus on average over the medium term, we now have in prospect an outcome of seven consecutive years of fiscal deficits — four in the past and three to come.
 
‘This leaves the country with little or no resilience to ongoing budget pressures and future economic shocks. We should have been in better shape.’

No excuses: BCA

‘Whichever government is in place after September is left with no excuses.’

‘They will have to properly restructure budget priorities through an independent review of the size, scope and efficiency of government, and address the failings of an uncompetitive tax system.’
 
ACCI Chief Executive Peter Anderson described it as ‘a Budget of Band-Aids when the patient required targeted surgery’.

He said small business had been short-changed through:
  • no company tax relief
  • higher personal income tax (Medicare levy)
  • no capital gains tax relief
  • no cost offset to fund the 1 July hike in the superannuation levy
  • no restoration of incentives for hiring new apprentices
  • no reduction in tax compliance and red-tape.
The Australian Industry Group said the anticipated cumulative deficits over the next three years of $48 billion are ‘sobering news’.

Reality has bitten: Ai Group

‘Economic reality has bitten,’ said Chief Executive Innes Willox.

He said there are some key positive measures in the Budget, which will assist industry to work through the current economic conditions. These include:
  • important infrastructure investments that will lift capacity and productivity
  • iIncreasing the flexibility of apprenticeships and aligning the apprenticeship system more closely to industry needs
  • the Skills Connect initiative aimed at helping businesses meet their training needs
  • maintaining the immigration intake at 190,000
  • bringing forward expenditure under the Clean Technology Investment Fund to help businesses invest in energy efficiency and low-emissions processes.
Willox said Ai Group is very concerned that some measures will increase the costs of doing business, including:
  • more medium-sized businesses will be required to make more frequent and earlier tax payments increasing their regulatory burdens and compliance costs and detracting from their cash flow
  • uncertainties over a large number of new tax integrity measures that will need careful working through in very close consultation with industry
  • increases in a variety of charges on business relating to 457-visa applications and import processing.
‘While this Budget does little immediate harm, it doesn’t provide sufficient confidence in the medium-term path back to surplus and leaves fundamental economic questions unanswered,’ Willox said.

Protects jobs: ACTU

Even the ACTU was muted in its praise for the Budget, saying it had protected Australian jobs by avoiding a ‘slash and burn approach’.

Unions also welcomed changes that help prevent businesses using loopholes to bypass paying their fair share of taxation.

Among the positive measures for workers is protection of unpaid entitlements for textile, clothing and footwear employees whose employers go into bankruptcy or liquidation.

People on Newstart and other allowances will be able to earn $100 per fortnight before their income support is reduced.
 
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