Surplus welcome, but Budget lacks vision: business

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Surplus welcome, but Budget lacks vision: business

Business has welcomed the 2012 Federal Budget’s return to surplus but criticised it for lacking vision, while unions regret the cuts to public services, jobs and social security.

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Business has welcomed the 2012 Federal Budget’s return to surplus but criticised it for lacking vision, while unions regret the cuts to public services, jobs and social security.

Industrial relations functions suffer a small hit, with spending dropping from $677m in 2012–13, to $554m in 2013–14, largely due to the ending of the Fair Work Australia (FWA) education campaign.

The Australian Chamber of Commerce and Industry (ACCI) said the Budget ‘is ambitious for Commonwealth finances but lacks vision for the broader economy’.

Spoilt
 
‘It is strong in its ambition to repair government finances, limited in its support for the economy and spoilt by its intention to proceed with the carbon tax and failure to deliver the promised company tax cut,’ said ACCI chief executive Peter Anderson.

He said that in key areas social policy has usurped the drive to a stronger economy.

‘Returning the budget to a $1.5 billion surplus over the next year is an ambitious goal, but one that should be supported by the business sector so long as economic conditions improve as forecast,’ he said.

‘The proposed fiscal contraction of over 3% of GDP in such a short period borders on the high risk, but can be justified so long as growth does not dip below the forecast 3.25%.’

Anderson said the budget does little to arrest the slide in competitiveness and productivity, apart from welcome initiatives such as:
  • targeted new funding for skills and workforce participation (including $19.4m for trade persons to upskill into their own business, an ACCI proposal
  • a loss carry-back scheme for small business
  • the formerly announced accelerated instant asset write off.
Productivity
 
The Business Council of Australia (BCA) said the Budget contains a number of welcome measures to support the productive capacity of the economy, and this is the right direction to be heading in.

It endorsed the continuing focus on skills and the protection of training initiatives in this Budget, including the additional funding for the up-skilling and re-skilling of Australian workers through the National Workforce Development Fund.

BCA said the boost to skilled migrant numbers to 190,000 is also an important measure that will help address current skills shortages especially with the very large projects which are so important to Australia’s productivity.

Additional cost burdens
 
The NSW Business Chamber said that while the government has delivered a long-awaited, balanced budget in 2012–13, the path to surplus has been paved with additional cost burdens on Australian business.

‘This is a Budget that returns to surplus on the back of hard working Australian businesspeople,’ said CEO Stephen Cartwright.

‘The Government has imposed significant additional costs on businesses, costs that will be particularly difficult to bear given the current weakness in the economic outlook.’

‘It’s a Budget that fails to reward Australian businesses for driving the world’s most resilient economy by stripping away the promise of a modest company tax cut and instead imposes an even greater burden through the start of the world’s biggest carbon tax from 1 July.’

Fairer Australia
 
ACTU president Ged Kearney said the Budget will help shape a fairer Australia, through a more progressive tax system, better assistance for low and middle income earners and protection for jobs in struggling businesses.

‘However, while we understand Treasurer Wayne Swan’s objective to deliver a surplus in the coming financial year, it is regrettable that this has resulted in cuts to public services, jobs, and social security for some of our most vulnerable community members,’ she said.

‘Specific initiatives we welcome from the Treasurer tonight include the Government’s commitment to the reduction of the inequitable tax concessions on superannuation contributions for high income earners, along with raising the tax free threshold to $18,000, which will mean about 630,000 low-paid workers will not pay income tax.

‘The crackdown on the living away from home allowance for executives is also good policy. The ACTU publicly called for this change at last year’s Tax Forum, as this is a straight out rort at the expense of working Australians.’
 
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