Reactions from interest groups

Budget Review 2014–15 Index

Indra Kuruppu

Australian Chamber of Commerce and Industry

The Australian Chamber of Commerce and Industry (ACCI) has backed the federal Budget as ’the budget we had to have’ as a nation. ACCI's chief executive officer, Kate Carnell AO, stated that reining in spending and short-term pain will put the budget on a credible path to surplus in a sensible time frame, which should not put unreasonable pressure on the economy. She said the Budget will also go a long way to restoring business confidence that will drive investment and job creation, particularly for small businesses.

Ms Carnell welcomed what she saw as the genuine structural reform in the Budget, saying that it will help address the underlying structural deficits in recent budgets and begin to reduce the size and scope of government. While Ms Carnell stated that businesses are willing to do their part including accepting reductions in industry assistance and programs, they ask that government continue to work with business to ensure that productivity enhancing programs are as far as possible maintained.

However, ACCI says that business continues to oppose the debt tax on higher incomes and the proposed paid parental leave scheme. Business will also examine some cuts to important productivity enhancing measures in trade, vocational education and training and small business support, and express concerns to government.

Ms Carnell stated that once the budget position repairs, temporary revenue measures should be repealed as soon as possible, and the government should aim to reduce income taxes closer to the company tax rate, which will help get government spending under control and allow for a more productive and prosperous economy. [1]

Australian Conservation Foundation

The Australian Conservation Foundation (ACF) says the budget takes money away from conservation, innovation and anti-pollution measures, while rejecting an opportunity to save at least $20 billion by reforming fossil fuel subsidies to big business, which will increase every year due to fuel excise increases. 

Chief Executive Officer, Kelly O’Shanassy, said that with the abolition of clean energy measures, cuts to research programs including the Commonwealth Scientific and Industrial Research Organisation, the National Environmental Research Program, the Australian Climate Change Science Program, the establishment of the Emissions Reduction Fund, and Solar Towns, the Government had missed the chance to continue cutting pollution through an effective carbon price and risked keeping Australian workers and businesses using outdated technology to address modern challenges.

While the ACF is disappointed that the federal government broke its election promise to maintain full funding for Landcare and has abolished the National Water Commission without clarifying which agency will take on the Commission’s critically important functions, the ACF welcomes the Green Army initiative and funding for the Reef Trust. The ACF also welcomed funding for Indigenous Land Management and the Indigenous Advancement Strategy, and stated they will lead to lasting benefits for Indigenous people and the environment in the north of Australia.[2]

Australian Council of Social Services

The Australian Council of Social Service has expressed deep concern that the spending cuts in the federal Budget will have the greatest impact on those who can least afford it, stating that the Budget entrenches divisions between those with decent incomes, housing and healthcare and those without.

While CEO Dr Cassandra Goldie welcomed some measures as targeting those for whom the age of entitlement should be coming to an end, including abolishing the Seniors Supplement, capping the Family Tax Benefit Part B, introducing a levy for people earning over $180,000, cutting corporate welfare, and taking superannuation payments into account when assessing eligibility for the Senior's Health Card, she said these will inflict little pain or will be felt for only a short time.

Dr Goldie said ’permanent and crushing effects’ will be felt by people on low incomes, young people, single parents, those with illness or disability, and those struggling to keep a roof over their heads. The Budget denies support to young people up to 29 years, for six months of every year, unless exempted, and then forces them into work for the dole. Changes to Newstart, Disability Support Pension and Youth Allowance will also disadvantage young people. Poorer families will be affected by the freezing of family payments for two years, the $7 co-payment for doctor's visits and other services, the fuel excise, and the increasing costs of Pharmaceutical Benefits Scheme medicines. Lack of guarantee of future funding for homelessness services and cuts to National Rental Affordability Scheme funding will affect the ability of people on low incomes to manage the cost of living.[3]

Australian Council of Trade Unions

ACTU President Ged Kearney has called the federal budget ‘a savage attack’ on the standard of living that Australians have worked hard for, and labelled the Coalition Government’s vision of Australia as a harsher, less equal Australia. Ms Kearney said the budget will make life harder for Australian workers and their families, with the Government’s assault on welfare, Medicare, education and the public sector representing the end of the fair go and the biggest attack on the social wage Australia had ever seen.

Ms Kearney said that the introduction of the Medicare co-payment would put pressure on low income families, while the value of all pensions including age and disability support pensions, and single parents payment would affect those who could least afford it. Changes to Newstart and youth allowance would leave young job seekers in poverty, and young people training to learn a trade lose direct financial support, instead incurring significant debt. University students will be affected by skyrocketing fees, paying real interest on their debts and paying them back from lower incomes.

Freezing the increase to the Superannuation Guarantee as well as lifting the retirement age will make it harder for Australians to save for retirement.

Ms Kearney said the Government has failed to invest in industry or innovation or outline a plan for the jobs of the future. She said that the Budget puts the interest of big business first, in the form of the company tax cut and $4 billion worth of subsidies to the big miners.[4]

Australian Industry Group

Australian Industry Group (AIG) Chief Executive Innes Willox has welcomed the ‘big fiscal ambitions’ in the federal Budget and the decisive steps taken to put the budget on a firm long-term footing, but noted that there are risks for short-term economic health.

While Mr Willox identified the budget repair levy as an inefficient way to raise additional revenue, which also dampens incentives to invest in Australian businesses at a time when investment is needed, he stated that the cuts to the company tax rate from 1 July 2015 will boost business investment and assist in much-needed recapitalisation of non-mining sectors of economy.

Mr Willox called for close consultation with businesses on the proposed radical overhaul to business innovation and business capability development programmes in the new Entrepreneurs’ Infrastructure Programme, in conjunction with strong initiatives in the National Industry Investment and Competitiveness Agenda.

Mr Willox said many businesses would be concerned by the cuts to research funding to Commonwealth Scientific and Industrial Research Organisation and Defence Science and Technology Organisation, which he thought should be matched by refocusing public sector research with a clear orientation on building successful links with business.

The AIG welcomed additional funding for the Export Market Development Grant scheme and the Export Finance and Insurance Corporation, the development of the Industry Skills Fund, the proposal to provide loans for students undertaking diploma and associate degree courses, the net migration target for 2014–15 with a continued emphasis on skilled migration, and capping the Fair Entitlements Guarantee at 16 weeks. The AIG also welcomed the Trade Support Loans initiative, but believed the axing of Tools for Your Trade allowance would detract from the benefits.

The commitment to new infrastructure projects addresses a deficit of spending, and the clear role for private sector financing of infrastructure through the asset recycling initiative was particularly welcomed.[5]

Business Council of Australia

The Business Council of Australia says the Budget is a solid start to putting the fiscal strategy back on track, but that there is much more work to do to support growth and deliver a sustainable budget position for the long term.

Chief Executive Jennifer Westacott expressed disappointment in ad hoc measures such as the deficit levy and said that changes to health and social security arrangements needed to be implemented carefully and sensitively to avoid unfair burdens being placed on particular groups in the community, such as some families and young people trying to find work.

Ms Westacott called for improvements in skills development, job services programs and more flexible workforce arrangements, and said that as an ageing population and globalisation places the Australian economy under greater competitive pressure, this Budget was the start of a strategic change agenda that must include fixing roles and responsibilities in the federation, improving the workplace relations system, removing barriers to competition, tax reform, and locking in the quality and affordability of the safety net.[6]

National Farmers’ Federation

The National Farmers’ Federation (NFF) has recognised the Australian Government’s commitment to bring the budget back into surplus and welcomed the federal Budget as largely delivering on the government’s election commitments to the agriculture sector, including increased funding to critical infrastructure projects, and commitments to retain the fuel rebate for farmers and stop water buybacks. While pleased with ongoing support for rural research and development corporation model, the NFF is disappointed with major cuts to the Cooperative Research Centre Programme and the Rural Industries Research and Development Corporation. The NFF recognises that reductions in government investment in natural resource management, funding for the International Agricultural Cooperation Programme and abolishing Australia’s Brand for Food Programme were difficult decisions. President Brent Finlay also expressed disappointment in the abolition of the Environmental Stewardship Programme, and stated that the cuts to and realignment of the National Landcare Programme will impact farmers and the expectations of the broader community. While disappointed with the abolition of the National Water Commission, the NFF looks forward to working with the Government to ensure that oversight of national water reform is delivered by an appropriate and independent body.[7]



[1].          K Carnell (Chief Executive Officer, Australia Chamber of Commerce and Industry), Business backs the budget that we had to have, media release, 13 May 2014, accessed 20 May 2014.

[2].          K O’Shanassy (Chief Executive Officer, Australian Conservation Foundation), Anti-environment federal Budget hands out billions in corporate subsidies, media release, 13 May 2014, accessed 21 May 2014.

[3].          C Goldie (Chief Executive Officer, Australian Council of Social Service), Budget divides the nation, young and old, rich and poor, media release, 13 May 2014, accessed 20 May 2014.

[4].          G Kearney (President, Australian Council of Trade Unions), Abbott Government tears apart Australian way of life, media release, 13 May 2014, accessed 20 May 2014.

[5].          I Willox (Chief Executive, Australian Industry Group), Federal budget: long terms ambitions–short-term risks, media release, 13 May 2014, accessed 20 May 2014.

[6].          J Westacott (Chief Executive, Business Council of Australia), Statement on the 2014–15 federal budget, media release, 13 May 2014, accessed 20 May 2014.

[7].          B Finlay (President, National Farmers’ Federation), Agriculture survives tough budget, media release, 13 May 2014, accessed 20 May 2014.

 

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