Gorilla lurks in Budget shadows
Business SA is pleased that the 2011-12 Federal Budget has a key focus on workforce participation, skills and training.
Business SA Chief Executive Officer, Peter Vaughan, said while the Budget’s focus on training and skilled migration is a positive initiative, it will take time to flow through to the economy.
“One part of the two speed economy is driving a huge demand for labour, which is expected to place upward pressure on wages, inflation and interest rates,” Mr Vaughan said.
“Unfortunately the booming resources sector will soon be hit by the 600 pound carbon price gorilla and the Budget forecasts will need to be revised.
“Nevertheless, we welcome a number of the positive initiatives that will provide a boost to the business community.
“The $5000 tax write-off for small business vehicle purchases will assist many small businesses across the State and is an added feature to the asset write-off program already unveiled.
“As skill shortages continue to burden the local business community, the $3 billion training package, which includes 130,000 new training places, is an important step for the local economy.
“Businesses will also benefit from programs to recruit skilled migrants and provide training opportunities to address growing demands on labour in the mining sector.
“The $34 million assistance package for manufacturers to supply resource sector projects will assist businesses to benefit from the upcoming mining boom.
“Changes to the Fringe Benefit Tax treatment of company cars and petrol use will save the Budget $950 million over four years.
“The investment in South Australian infrastructure, including roads, rail and health, is an important contribution to the future of the State.
“Changes to the tax treatment of write-offs and deductions on major infrastructure projects that operate under PPPs will encourage private sector investment and it is positive that there is more funding for Infrastructure Australia.
“It is pleasing that the Government has continued to maintain its commitment to families and support for low income earners.
“With our local unemployment above the national average, the economy will benefit from initiatives encouraging the long term unemployed back into the workplace and welfare to work reforms.
“However, it is not a tough budget and it is disappointing that significant tax reform has still not been considered.
“From a local perspective, the significant fall in GST earnings for South Australia is certainly a concern in the lead up to the State Budget and will limit the scope for the State Government to make the much needed cuts to business taxation, such as land tax.”
