"Critically, the Budget provides a substantial boost for smaller businesses by lowering tax burdens, extending asset write-off eligibility and cutting red tape. It gives welcome support for apprenticeships and traineeships through the new Skilling Australians Fund. And the heavy emphasis on infrastructure investment will serve as a foundation for longer-term improvements in transport in our cities and regions.
"We welcome the retention of the timetable for the return to a budget surplus. This has been achieved in the context of a realistic assessment of gradually improving economic growth, employment and business investment while taking a range of savings measures off the table and maintaining the commitment to a uniform 25 per cent company tax rate. The budget makes new savings and introduces new revenue measures that will add to the credibility of the path to budget repair.
"A number of the revenue measures – a further lift in personal income tax through the Medicare Levy increase; the new bank levy; and the steep hike in skilled visa charges – highlight the very limited range of revenue options available under existing tax arrangements and underline the importance of a substantial remodelling of Australia's taxation arrangements.
"In addition to the focus on smaller businesses, infrastructure and skills, industry will welcome:
- The retention of the Research & Development Tax Incentive;
- The $100 million Industry Innovation Fund with its focus on automotive transition and advanced manufacturing;
- The acceleration of defence spending to 2 per cent of GDP by 2020-21;
- The measures to improve housing affordability – particularly the land release measures which will help boost housing supply; and
- Maintaining permanent immigration at 190,000 for 2017-18.
"There are, however, significant new imposts on businesses who need to sponsor skilled migrants to bolster and train their workforces. This will add to costs, prices and will put pressure on business margins. The new levy on banks is unfortunate. It is likely to see financing costs rise across the economy and it could open the way to arbitrary imposts on other sectors.
"Many businesses will be disappointed that the Government did not build on its response to the east coast energy crisis by introducing more immediate cost-relief measures. The Government's response to the Finkel Review will provide another opportunity to introduce such measures. There is also unfinished business to support business innovation and attention will now turn to the next tranche of the National Innovation and Science Agenda due in coming months," Mr Willox said.
Media Enquiries: Tony Melville – 0419 190 347