Budget 2008: Reaction
Wednesday, 14 May 2008
General
Wayne Swan – Federal Treasurer: "It is a budget that strengthens Australia's economic foundations and delivers for working families under pressure. It is the responsible budget our nation needs at this time of international turbulence and high inflation at home."
Malcolm Turnbull - Shadow Treasurer: "Comparing the Treasurer's rhetoric this year to the budget papers, we have to ask whether Mr Swan knew what was in the budget. After years of Coalition tax-cutting budgets, Mr Swan is introducing new taxes to raise the cost of alcohol, motor cars, health insurance and energy - all of which contribute to inflationary pressures."
Steven Ciobo – shadow minister for small business: “Wayne Swan has taken an axe to small business funding in the budget, wiping almost $1 billion in funding for important programs to assist small to medium operators. He’s robbed the engine room of the economy, particularly in areas of entrepreneurship and innovation which the Government should be encouraging, rather than discouraging by axing grants and advisory services.
“What’s clear is Labor does not believe in small business, and after just seven months at the helm, Swan couldn’t wait to cut the rope, abandon ship and leave small business to steer its own ship with almost no assistance from the Government. The massive spending cut comes on top of the 15-year record collapse in business confidence under the leadership of Kevin Rudd, and a Treasury forecast that unemployment will increase as a result of Labor’s workplace relations laws.”
Michael Blythe - chief economist Commonwealth Bank:“Inflation is still pretty high. So that tells you it's a struggle to wind back inflation and there is nothing there that the Reserve Bank will tick off and start cutting rates, so we still have the impression the Reserve Bank will have a tightening bias out of August."
Greig Gailey - president Business Council of Australia: “Real spending is set to grow at half the rate we have seen in recent years. It is commendable that this has been achieved without sacrificing spending in key areas such as education and infrastructure. This will take pressure off the economy and increase our capacity to grow over the longer term. Significant investment in infrastructure and education is critical to sustaining Australia’s economic prosperity.”
Statement from Council of Small Business of Australia: "Additional funding has been made over the next four years so we now call on the Federal Government to ensure that duplications and areas of need are identified and dealth with. In this budget the Government re-announced their additional funding for the Business Enterprise Centres being $42 million over the next four years. However the Howard government's Business Entrepreneurs Program will be cut including the Small Business Field Officers, a saving of $10.5 million."
Entrepreneurial vision
Gregory Will – partner, PricewaterhouseCoopers: “It’s ‘business as usual’ for small business. With no support for small business growth into export markets, there is no incentive for small business to be more competitive in Australia or overseas. The 2008/09 budget did not encourage an Australian entrepreneurial spirit. The $700 million Commercial Ready program has been cancelled and there is no differentiation between small and big businesses.
“Where is the encouragement for small business through incentives and relief? Where is the incentive to invest in small business? When starting up a business it is difficult to obtain finance. Small businesses need support and encouragement to take risks and be competitive.”
Skills & Training
Mary Hicks - director of education and training ACCI: “The budget generally honors our expectations, with two standout additional initiatives we didn’t expect. Firstly the additional funding towards high schools and vocational education and training programs. Also Brendan O’Connor’s announcement to better connect with employers. We consider that quite innovative and should see better efficiencies. The devil will be in the detail. At this stage we are pleased. The [budget] is on the right track taken as a whole.”
Tony Steven - CEO Council of Small Business of Australia: “Jobs and training are of central concern. We are happy with vocational education and training being promoted. It should be a first step into more significant money into training.”
Infrastructure
Joshua Williamson - TD Securities senior strategist: "There is certainly a lot in there for infrastructure and federalism generally. I think it is generally favourable for the market. I think the Reserve Bank will be quite happy with that."
Business Council of Australia Statement: "We welcome the establishment of the Building Australia Fund as an effective way of ensuring that today’s strong revenue growth can be better directed to meet Australia’s long term infrastructure needs. The emphasis on careful prioritisation of investments, coordination across governments and rigorous vetting of projects is very positive."
Greg Evans - ACCI Director of Industry Policy and Economics: "With the three funds announced we are keen for the money to be spent in line with a rigid cost-benefit analysis. An audit is priority to ensure full social and economic benefit."
Heather Ridout - Chief Executive Australian Industry Group: "This puts money behind a fresh start and should provide the foundation for a much-needed expansion of our national capacity and a lift in productivity."
Tax Reform
David Pring - tax partner, Deloitte: "Small and medium businesses will be waiting with bated breath for the simplification they so desperately need. Currently mid-cap companies including many private companies have to contend with the same complex tax system that applies to the top end of town. A simpler tax system with reduction of red tape that had been promised in recent years was announced as part of the budget. The measures are to be released by the end of 2009.”
SMEs would like to see a simpler system, removing complex anti-avoidance provisions and doing away with double reporting of information to the tax office, he says. “To date the only concessions for small business apply to very small businesses with turnovers of less than $2 million or CGT concessions for businesses worth up to $6 million.” A genuine review of business taxation will be good news for SMEs, Pring says, if it adequately deals with the many levels of tax including state and federal taxes. “The government’s credentials will be tested in delivering on the execution of the reform announced.”
Greg Evans - ACCI Director of Industry Policy and Economics: “Company tax reform will be the next cab off the rank. There will be significant surpluses going forward and we expect a fall in the tax and regulator burden on companies.”
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