Tonight’s Federal Budget takes steps towards making government programs more sustainable while offering welcome support to small businesses so they can continue to grow and create jobs, the Australian Chamber of Commerce and Industry said today.
James Pearson, CEO of the Australian Chamber, said: “Tonight’s Budget shows the difficulty the Government faces in getting spending under control. We are pleased to see action to achieve a surplus by 2020/21, but are concerned that most of the improvement to the bottom line comes from more taxes rather than less spending.
“The Australian Chamber called for the Federal Government to reduce its spending as a share of GDP to 25 per cent, so it is pleasing the Government plans to achieve that by 2019/20, but unfortunately tax receipts are on a path beyond 25 per cent of GDP by the same year. Between 2017/18 and 2020/21, receipts are forecast to rise 1.6 percentage points while payments will reduce by only 0.2 percentage points.
“Small businesses are particularly pleased to see the highly successful instant asset write-off extended to June 2018, reflecting our Pre-Budget Submission, and made available to businesses with a turnover up to $10 million. We are confident this will encourage restaurants to buy more kitchen equipment, landscape gardeners to buy more lawn mowers and tech companies to buy more hardware.
“We have consistently called for more action to cut unnecessary regulation, so we are pleased to see the Government agree to work with the states and territories to cut their red tape through the $300 million National Partnership on Regulatory Reform. It is vital that the Federal Government does not allow new red tape to take the place of the $5.8 billion that has previously been cut. We also welcome the Government’s decision to recommit to its Enterprise Tax Plan.
“The focus on infrastructure is welcome because it can help make our businesses more productive while taking advantage of low interest rates. We encourage the Government to partner with the private sector to deliver these projects, and to ensure projects reflect the priorities identified by the independent Infrastructure Australia.
“We welcome the Skilling Australians Fund’s efforts to improve the skills of the Australian workforce, particularly via apprenticeships. However we have concerns about the associated increase in costs for employers using the temporary skill shortage visa and the employer-nomination scheme for permanent migrants. Overseas workers can help Australian businesses grow and therefore create local jobs.
“The business community does, however, have concerns with some parts of the Budget.
“The Major Bank Levy, which is expected to collect $6.2 billion over four years, will hurt the consumers of banks as well as the millions of Australians who hold shares in banks, including through their superannuation. Other announcements relating to banks run the risk of giving governments too much involvement in the affairs of private companies.
“The increase to the Medicare Levy amounts to an $8.2 billion income tax increase across four years. The National Disability Insurance Scheme is an important initiative, but we need to think carefully about the best way to fund it.
“Efforts to target what the Government terms tax ‘avoidance and abuse’ must be directed carefully to ensure they do not inadvertently capture legitimate business practices or create additional red tape.
“Despite these concerns we believe the Budget has potential to act as a catalyst for improved business confidence, but for this to be achieved it must not get stuck in the gridlock of the Senate. We urge the Opposition and crossbenchers to engage constructively on the Budget rather than seeking to score political points.”