The good, the bad, and the ugly?
The Federal Budget always has great implications on businesses and provided below is a number of opinions from select industry groups.
Australian Retailers Association
The peak industry group in Australia’s retail sector has said that the budget delivers “the good, the bad, and the ugly” for Australian retailers.
“By delivering on promises, Australians will benefit from tax cuts of $46.7 billion over four years which will hopefully flow back into a stalled retail consumer economy,” ARA Executive Director Richard Evans claimed. “The ARA also sees the Skilling Australia initiative as a positive with $1.9 billion being allocated to address skill shortages – hopefully with a strong focus on the services industry. Also, the announcement of a strong regional roll out of city strength broadband will assist remote and regional retailers stay connected to suppliers, customers and government. This is the good,” Evans said.
“The bad? The ARA believes the projected growth of 2.75% is not anti-inflationary and hoped the government would aim for a higher growth target. In the current economic climate, we believe the Government should not strip demand but rather support and encourage Australia’s retail sector which is already feeling the pinch of a tightening economy.”
“We also see the newly announced Enterprise Connect Innovation Centres are a reinvention of what is already available to small businesses when what is really required is a thorough review of bureaucratic red-tape across the State and Territories,” Evans added.
“While the Budget delivers on the election promises from November 2007, the ARA sees the outlook for Australian retailers to remain ugly with predictions that demand will continue to fall,” Evans concluded.
National Farmers Federation
Australia’s leading industry group for farmers has thrown their support behind the 2008 budget, labelling it as a budget which “addresses major challenges Australian agriculture must overcome”.
“This Budget combines essential spending on building capacity across key areas that hamper economic growth – where Australia desperately needs to be more astute and efficient – with savings at the margins,” NFF President David Crombie said.
“It balances concerns that $31 billion in tax cuts may further fuel inflation against spending cuts while, importantly, also targeting investment to boost our climate change adaptation and drought mitigation response, developing and building our trade skills base, overhauling our rundown infrastructure and ensuring water-use efficiency reform is holistic and practical.
The NFF were pleased with measures to help deal with climate change and drought, believing they “begin the shift towards the NFF’s call to better prepare our agricultural productive base for less water, increased climate variability and the possibility of longer periods of drought”.
The $20 billion investment in the ‘Building Australia Fund’ was considered positive with its ability to deal with critical transport and communications infrastructure. “With Australia’s freight task set to double by 2020 – and triple along the eastern seaboard – it underscores the need for Government and industry to work in-tandem to strategically overhaul and integrate freight infrastructure… across road, rail, air and sea systems,” Mr Crombie said.
The NFF also indicated approval of the water plan but outlined their concerns that the $11 billion ‘Education Investment Fund’ has an inbuilt “incapacity to deliver flexible training for regional students”.
Australian Chamber of Commerce and Industry
Australia’s largest and most representative business organisation has indicated their support of the Federal Budget but with some reservations.
“The budget is good on infrastructure and workforce skills, and has some good measures on government spending, such as means-testing and welfare targeting,” Chief Executive Peter Anderson stated. “These will kick-start the government’s five-point plan to fight inflation.”
“The downside is that the budget forecasts the jobless rate to rise from 4.2% to 4.5% over the 2008-09 financial year,” Mr Anderson added. “The size of government should be reduced further. The rate of expenditure growth has been reduced, but is still running at 1.1% in real terms and the surplus is estimated to be $21.7 billion.”
The ACCI also said that personal tax cuts were welcome but reform was needed to lower marginal, capital gains and company tax rates while indicating their belief that they budget would help productivity in Australia improve.