Reactions from interest groups

Budget Review 2015–16 Index

Indra Kuruppu

Australian Chamber of Commerce and Industry

The Australian Chamber of Commerce and Industry (ACCI) is very supportive of small business measures, believing they will give small businesses the confidence to grow, invest and hire new staff and encouraging the parliament to support these measures. In particular, ACCI mentions the 1.5 percentage point cut to the company tax rate for businesses with turnover of less than $2 million and the 5 per cent tax discount up to $1000 for other businesses, the $20,000 instant asset deduction, and efforts to reduce red tape. 

ACCI also supported measures to stimulate the labour market, including simplifying work experience arrangements, greater flexibility in wage subsidy payments, wage subsidies for older workers and changes to employment services. However, ACCI cautioned that these initiatives need to be carefully structured to most effectively meet the needs of employers and not lead to employment churn. ACCI also supported $25 million to assist businesses to take advantage of free trade agreements. 

However, ACCI is concerned about the size of the deficit and urges further spending cuts. It urges the government to work with other parties to get support for its legislation and urges all parties to support the Budget.[1]

Australian Conservation Foundation

The Chief Executive Officer of the Australian Foundation (ACF), Kelly O’Shanassy, says that the Budget chooses big polluters over the community, highlighting that there is little in this Budget on climate action and criticising the government for disregarding the need for a healthy, safe environment.

On fossil fuel subsidies the ACF is critical  of the failure to reform Fuel Tax Credit diesel subsidy and to address tax concessions claimed by resource companies, stating that changes to these two measures could have saved $15 billion and reduced pollution by up to 9 per cent.

Ms O’Shanassy is critical of $1.5 billion used to pay companies under the emissions reduction fund which will fail to achieve pollution targets by 2020, as well as $73.2 million in cuts to the Green Army program which comes on top of almost $500 million of cuts to the Landcare program.  The ACF is also critical of funding cuts to the National Heritage Trust ($12.3 million over five years), to water buy-backs ($22.7 million over two years from 2017–18) and to government departments and agencies that help to protect the environment.

The ACF does welcome $100 million in initiatives aimed at protecting the Great Barrier Reef, but is wary that funding for Northern Australia could be used to build ports and railways to allow coal from the Galilee Basin to be transported across the reef.[2]

Australian Council of Social Service

The Chief Executive Officer of the Australian Council of Social Service (ACOSS), Dr Cassandra Goldie, welcomed a fairer approach to pension reform and investment in child care, but said the ‘overall package retains many harsh cuts from last year’s Budget which will leave many people on the lowest incomes worse off’. ACOSS also criticized the Budget for failing to stimulate investment in jobs.

ACOSS also stated that people on low incomes are still doing most of the ‘heavy lifting’ of budget repair, with unpassed budget measures from last year still part of the Budget, including cuts to health, education, community services and family and youth payments.

On the families package, Dr Goldie said that the increased investment in child care is overdue and welcome, but criticizes it for providing overly generous subsidies for high income earners and the government’s strategy of relying on cuts to family payments to fund it. ACOSS also criticizes cuts to Paid Parental Leave, saying they are taking the country backwards in search for short-term savings.

ACOSS supports changes to the pension and urges the government to consider changes to superannuation tax breaks for high income earners as well. 

ACOSS is critical of the Budget for failing to invest enough in jobs and skills, believing the small business measures are insufficient to stimulate jobs growth. ACOSS is also critical of a failure to fix the low rate of allowance payments and indexation arrangements, lack of investment in affordable housing, the loss of funding for vital policy, advocacy and service delivery across social services, health and legal assistance especially in Aboriginal and Torres Strait Islander communities. 

ACOSS urges tax reform as the next priority for the government while preserving the social safety net into the future, in particular urging reform to generous super tax concessions, negative gearing and capital gains tax breaks. [3]

Australian Council of Trade Unions

The Australian Council of Trade Unions (ACTU) believes the budget does nothing to create jobs, highlighting that the budget itself forecasts unemployment to stay above 6 per cent for the next three years. Its strongest criticism is that the small business tax cut will not promote jobs growth, saving the average small business no more than $20,000 a year which is not enough to hire new staff.

The ACTU criticises the government for failing to produce measures to increase productivity, with cuts to research and innovation programs.  ACTU urges the government to invest in infrastructure, skills and training and the public services to create jobs and boost the economy.

The ACTU also criticises the government for what it claims as unfairness in the budget measures: tying childcare assistance to unfair cuts to family benefits and paid parental leave; cutting almost $1 billion from health; and failing to address superannuation for the wealthy. The President of the ACTU Ged Kearney states that ‘Australian families will be worse off under this budget with cuts to paid parental leave and family tax benefits that are far greater than the government’s investment in childcare’.[4]

Australian Industry Group

Australian Industry Group (Ai Group) believes the Budget is a good start in providing incentives to invest for small business and welcomes forecasts for a surplus over the medium-term, but cautions that there are risks that the Budget may not provide the lift in business confidence and demand needed to increase investment, productivity, and growth and to address unemployment. Ai Group is wary that the budget forecasts worsening unemployment and worries that the GDP forecasts are optimistic.

Innes Willox , Chief Executive of the Ai Group, welcomes the package of business measures to provide incentives for small businesses to grow, invest and create jobs. He particularly welcomes the increase in the immediate tax deduction for capital expenses, but notes that it is limited to businesses with turnover of less than $2 million. He urges fundamental tax reform and a cut in the company tax rate for all companies.

Mr Willox also welcomes efforts to strengthen tax avoidance, but urges that the measure be implemented in consultation with business to avoid creating business uncertainty. He also supports extending the GST to online purchases and calls for further broadening of the GST as part of the upcoming tax reforms. Ai Group also welcomes the changes to childcare for their potential to improve workforce participation, but cautions that any changes to paid parental leave must not deter businesses from offering their own leave schemes.[5]

Business Council of Australia

Jennifer Westacott, Chief Executive Business Council of Australia (BCA), supports the federal Budget ‘as a sound, sensible and thoughtful Budget, taking pragmatic steps to get fiscal strategy back on track, while investing in jobs, participation and the capacity of the economy’. The BCA also urges the Senate to pass the Budget. 

The BCA believes the Budget provides a boost to small business and creates a better environment for business confidence that will drive investment, job creation and economic growth.

Ms Westacott calls on the government to reset the fiscal strategy over 10 years to deliver durable budget outcomes and stronger economic growth underpinned by maintaining Australia’s AAA credit rating, progressively returning the budget to surplus, ensuring the durability of priority services including an adequate safety net and ensuring capacity for investments in infrastructure and human capital.

On the fiscal position, the BCA believes the government has taken important steps to bring spending under control and invest in the capacity of the economy. Nonetheless, the BCA believes that achieving the planned budget surplus in 2023–24 needs a clearer long-term plan.

On the durability of priority services, including an adequate safety net, the BCA supports better targeting of the aged pension, the Pharmaceutical Benefits Scheme and the paid parental leave scheme. The BCA also urges considering further changes to pensions as part of a review of Australia’s retirement income system.

On capacity building, the child care package is a sound approach to encouraging workforce participation. The BCA also supports additional investment in infrastructure across northern Australia. While the BCA supports the small business package it cautions about a two-tier company tax rate.[6]

National Farmers’ Federation

The National Farmers’ Federation (NFF) supports the budget for delivering modest gains for the farm sector, welcoming measures on trade, tax breaks and small business.

NFF President Brent Finlay highlighted support for the following measures:

  • measures that allow farmers to accelerate depreciation for spending on water, fodder and fencing which will encourage investment and improve cash flow on farm
  • $25 million to help producers access the benefits of free trade agreements (a policy called for by the NFF)
  • small business tax cuts which will assist more than 110,000 farm businesses that have less than $2 million in cash receipts and
  • $83 million in pre-announced drought funding for rural communities and pest and weed control.

The NFF is awaiting the Agriculture Competitiveness White Paper and Northern Australia White Paper to measure the Government’s commitment to agriculture.[7]



[1].          K Carnell (Chief Executive Officer, Australian Chamber of Commerce and Industry), Budget turbocharges small business to grow, invest and hire, media release, 12 May 2015.

[2].          K O’Shanassy (Chief Executive Officer, Australian Conservation Foundation), Budget chooses big polluters over community, media release, 12 May 2015.

[3].          C Goldie (Chief Executive Officer, Australian Council of Social Service), ACOSS on budget 2015: better direction but lower income earners still doing the heavy lifting, media release, 12 May 2015.

[4].          G Kearney (President, Australian Council of Trade Unions), Budget fail  no jobs, no growth, no opportunity,  media release, 12 May 2015.

[5].          Innes Willox (Chief Executive, Australia Industry Group) Constrained budget heading in the right direction-statement by Innes Willox, Chief Executive, media release, 12 May 2015.

[6].          J Westacott (Chief Executive, Business Council of Australia), Statement on the 2015-2016 federal budget, media release, 12 May 2015.

[7].          B Finlay (President, National Farmers’Federation), Budget lays groundwork for Ag white paper, media release 12 May 2015.

 

All online articles accessed May 2015. 

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