Budget Workmanlike But More Ambition Needed
10 May 2011
Australia's largest and most representative business organisation, The Australian Chamber of Commerce and Industry (ACCI) says the Government has delivered an effective working budget that provides the opportunity to return to a fiscal balance in two years and boost workforce skills.
ACCI's Chief Executive Peter Anderson said, "the Budget gets the short term thumbs up but whether it works in the mid to longer term on either the productivity side or the return to surplus depends heavily on good fortune and hope. The good fortune is that commodity prices and North Asia support big revenue flows. The hope is that the Reserve Bank decides the spending cuts to be enough to hold back on rate rises."
"The investment in workforce skills, skilled migration and workforce participation is wise and with industry driven support it can address some of our skills deficits and shortages," he said.
"Small business will feel short changed. The extra depreciation on capital purchase of new vehicles is good but change in fringe benefits on motor vehicles could be counter-productive. There is no real relief on business costs, red tape or compliance," Peter Anderson said.
"The nominated savings of $22 billion over the forward estimates identify some important areas of government expenditure that needed to be addressed and should be seen as a starting point for future reform. The new spending measures outlined which assist in enhancing our productive capacity and workforce participation are welcomed," he said.
"Recent natural disasters and an appreciating dollar have affected the revenue outlook making continued focus on identifying waste and inefficiencies in spending imperative. The fiscal outlook presented tonight is unlikely to prevent expected interest rate increases."
"The Building Australia’s Future Workplace initiatives are to be applauded as investment in building skills and encouraging participation. Similarly improvements to encourage infrastructure investment and promote transparency through published cost benefit analyses are timely," Peter Anderson said.
It is disappointing but not surprising that there are no major tax reform changes in the budget. The proposed carbon tax is not in the Budget but it remains a dark economic cloud on the horizon for industry.