VACC, the peak Automotive Industry body in Victoria, has expressed concern that the Federal Budget failed to clearly outline the debt re-payment plan for Australia’s forecast deficit.

The Treasurer, Mr Wayne Swan, has delivered his ‘Nation building for Recovery’ Budget, which outlined a $58 billion deficit.

“There were few surprises in the Treasurer’s Budget given the many leaks, and Mr Swan can be applauded for preferring what he referred to as a ‘program for responsible borrowing’ over balancing the Budget through tax increases and cutting key services,” VACC Executive Director, David Purchase, said.

“However, it was disappointing that the Treasurer did not make it crystal clear what will be done over the next five years to return the Budget to surplus.

“The Rudd Government has forecast a four point five percent growth per annum to 2015 when the recovery comes, but this expectation may be regarded as optimistic and therefore, the deficit may continue beyond the Government’s projections.

“It is all well and good embarking on a program of infrastructure measures in the name of ‘Nation building’, but this has to be repaid. We are concerned that this could deliver economic problems in the long run.

“A positive for our 5,500 members was small business tax breaks being increased to 50 percent of the value of assets ordered by December 2009.

“However, it is a shame not more was announced to assist and stimulate small business as they are the engine room of the economy and generate jobs.

“The Budget is a major lever for the Government to pull to address recessionary issues but it should not be seen as the only lever. There are other mechanisms that must work in sync with the Budget such as wages policy. In this regard, the Government must maintain a very restrained policy to ensure the continued viability of small business in particular.

“VACC will now examine the Federal Budget in detail and discuss further policy points in due course,” Mr Purchase said.