“Treasurer Peter Costello’s generous budget contains many positives for the Australian community and business,” VACC Executive Director David Purchase said.
“It clearly demonstrates the underlying wealth of the Australian economy, and it is appropriate that it gives back to the community through tax breaks and targeted spending on key community issues.
“The nation building initiatives with increased spending on roads and rail infrastructure, research and the Murray-Darling basin are welcome, and overdue.
“However, in the context of the massive tax cuts and relief for superannuants, there could have been more in the budget for rail and road infrastructure – rail in particular. A free-flowing freight network is of critical importance to business efficiencies and reducing freight costs for business, particularly in view of the expected doubling of the freight task in the next ten years.
“Also welcome, but again where there could have been more, was the tax relief announced for small business. Speeding up the depreciation rate, and simplifying small business taxes will be welcomed by all VACC members in small business,” Mr Purchase said.
“An oversight of the Budget was its omission of attention to alternative fuels, bio-fuels and LPG. There was also an opportunity missed by the Treasurer, in the context of this generous budget, to remove the GST on fuel – retaining a tax on a tax is poor policy any way you look at it.
“Overall, the only nagging concern with this budget for small business is its potential to be inflationary. In directing the greatest benefits to ‘Baby Boomers’ and in providing massive tax cuts in an environment of a firming Australian dollar, will put increased pressure on Australia’s terms of trade. We can expect to see increased demand for cheaper imports.
“Time, of course, will tell. Positives aside, there remain some nagging concerns that this may not be the best budget for the times, but the best budget for shorter term ambitions, “Mr Purchase said.
