Date issued: 12 May 2009
The Rudd government's $57 billion budget deficit is extraordinary by any measure and will only be justified if the government's long-term investments deliver sustainable economic growth, CPA Australia president Richard Petty said this evening.
'A total of $22 billion has been committed to improve infrastructure at a range of levels - transport, communications, energy, education and health - and if implemented correctly it will provide multiple benefits for the nation, including fiscal stimulus and jobs,' Professor Petty said.
'The government has also committed $491 million over four years to uncap the number of university places - a move which it is hoped will result in more skilled employees and increased productivity in the longer term.
'However, CPA Australia believes more should have been done in the budget for the small business sector - one of the main drivers of the economy employing nearly four million people.
'We welcome the personal tax cuts and increased tax breaks as well as the Export Market Development Grants scheme which will assist some small businesses, but it is crucial that support is given to the small business sector to access finance.
'The government must continue to engage the banks and make this happen to ensure future viability of SMEs. More than a 1000 SMEs entered administration in March this year. This is a significant increase on figures in the past decade.'
Other important aspects of the budget are:
Superannuation: The government's decision to reduce the super contributions cap is noted. We accept it might be necessary but the impact on ordinary Australians, particularly the self-employed and irregular income earners, such as women taking time out - needs to be minimised.
This, coupled with the announced reduction in the co-contribution, will seriously reduce long-term retirement savings for these people.
We welcome the government's decision to drop proposed changes to include gross tax-free super income in the income test for the Commonwealth Seniors Health Card.
Paid parental leave: We support the government's decision to fund the scheme but it must be cost neutral to employers. Any scheme that makes it more expensive to employ women will not work in the interests of women or business.
Managed investment trusts: We support the government's decision to enable certain MITs to continue to benefit from the capital gains tax discount. This will maintain their international competitiveness and assist in Australia's objective to become a financial services hub.