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Fed Budget described as on task, disciplined, ambitious by AIG

16 May, 2008

"The Rudd Government's first budget is well and truly on task. It has taken a hard-nosed approach to spending to address inflation and it makes ambitious investments in nation-building," Australian Industry Group (Ai Group) Chief Executive Heather Ridout has said.

"The Government has backed up its promises in education, personal taxation, in developing business capabilities and in building infrastructure, including broadband with sizable allocations over the next few years. This puts money behind a fresh start and should provide the foundation for a much-needed expansion of our national capacity and a lift in productivity.  The Government has the opportunity to build further on these directions with its reviews of taxation, innovation, regulation, industry policies and defence.

"By more than offsetting new spending with savings and by running a large surplus, the Government has adopted a responsible approach which should be helpful in addressing inflation. As acknowledged in the Budget, the economy looks set to slow appreciably and there remains a lot of uncertainty with the domestic and global outlook. In this context it is appropriate that the Government has left open the option of further fiscal tightening down the track.

"Ai Group particularly welcomes:

- The initiatives in skills, vocational education and training and higher education, including the Education Investment Fund;
- The commitments to the Building Australia Fund;
- The personal income tax cuts;
- The variety of measures to assist in reducing greenhouse emissions and adapting to climate change;
- The Enterprise Connect Innovation Centres for small and medium sized businesses; and,
- The expansion of the skilled immigration program.

"Added to these, the remodelling planned for the Federation represents an ambitious plan to improve intergovernmental cooperation and to deliver better outcomes across a variety of areas.
"Ai Group welcomes the Australian Tax Review. We have sought a cross-jurisdictional review of taxation arrangements and this review provides an opportunity to make some real improvements in the pattern of taxation across the Commonwealth.  

"The removal of Commercial Ready, while part of the tightening of spending, leaves a gap in the overall innovation system. The current National Review of Innovation provides scope for a consideration of the total system. Industry will be looking to this review for a significant enhancement of innovation programs," Ridout said.

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