Fed govt needs budget to lift inflation, underwrite future growth
“The Federal Government’s first Budget marks the moment when the rubber hits the road. The Budget will need to do some heavy lifting on inflation while at the same time putting in place the first investments in the major project of delivering a once in a generation lift in our national capacity”, Australian Industry Group Chief Executive, Heather Ridout, has said.
“Success in both these areas will be the benchmark against which the Budget should be judged. Ai Group’s Budget priorities are designed to meet these twin objectives.
“We are looking for substantial and well-targeted reductions in less productive areas of expenditure. At the same time we have warned the Government of the dangers of indiscriminate spending cuts that for the sake of Budget night appearances reduce productivity-enhancing expenditure.
“A concerted program of spending cuts should facilitate a reorientation of spending to the following areas.
“Building domestic productive capacity by:
- Delivering the scheduled personal income tax cuts in full;
- Kick-starting the education and training revolution;
- Giving effect to the election commitment to accelerate the roll-out of high speed broadband;
- Extending the existing Auslink priorities to include the important area of urban congestion; and
- Accelerating the development of business capabilities by implementing the proposed Enterprise Connect program.
“Encouraging and facilitating the adjustment to the carbon constrained economy by:
- Announcing a phased reduction in the company tax rate to 25% to help offset the economy-wide impacts of the introduction of the Emissions Trading Scheme;
- Undertaking a campaign to disseminate to businesses and households information about reducing direct emissions and improving energy efficiency; and
- Lifting the capacity of energy-efficiency and emissions-reduction advisory services.
“Boosting future retirement incomes of low-income earners by measures such as:
- Refunding into the superannuation accounts of low-income people an equivalent of the 15% tax on compulsory employer contributions;
- Extending eligibility to the scheme to middle-income earners aged over 50; and
- Increasing the amounts available under the Superannuation Co-contribution Scheme.”
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