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No Surprises Business-Friendly Budget

May 4, 2016 Business News No Comments Email Email

The 2016 Budget is big on engendering the have-a-go spirit on which Australia was founded with a strong package to incentivise businesses to invest and Aussies to work, but it lacks a strong narrative for the case for broader reform.

Industry association Consult Australia, Chief Executive Megan Motto stated ‘Overall the signs for the Australian economy are still shaky. The budget position might be relatively strong in global terms but it has deteriorated since MYFEO, and this budget acknowledges the difficult path to surplus. The Budget papers and rhetoric make no mention of the diminishing dependency ratio or the challenge of our transitioning economy in volatile times.

‘However, the Budget lays the groundwork for enhanced confidence amongst the business community, increased international competitiveness, and renewed energy to combat youth unemployment. Tax breaks for middle(ish)! Australians are also welcome.

‘Importantly, the Budget hits the right note that the government was desperately in search of in light of an upcoming election – it is fundamentally fair.

‘The continuation of a solid infrastructure investment pipeline is important, although there is very little new spending in the package. Hopefully this is only to leave room for pre-election announcements to come.

The Government’s commitment to the Smart Cities Plan acknowledges the role of cities in driving economic, productivity, sustainability and liveability outcomes. It represents a modest but symbolic investment in ensuring we plan better to leverage these potential gains.

Consult Australia remains interested to see the Government’s response to the National Infrastructure Plan.

Ms Motto observed ‘It is critical that the Government, through its advisory body Infrastructure Australia look closely at the broader policy and funding reforms proposed in the Plan. This will need dedicated resourcing and should not be ignored if we want better bang for our infrastructure buck in the future.

‘The return of over $850 million in unused funds from the Government’s Asset Recycling Initiative is an indictment on those state and territory governments that have failed to take advantage of this facility.

‘It is disappointing not to see savings from previous commitments to infrastructure redirected to reform initiatives. For example, these funds could help improve business case development for new projects, or accelerate pilot studies into alternative funding arrangements like road user charging, or value capture, to charter difficult challenges more broadly in the infrastructure arena.’

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