Doing the Federal Budget Differently

Wednesday 12 May, 2010 | Tags: State and Federal Budgets

Statement by David Goodwin, CCIQ President

Chamber of Commerce and Industry Queensland (CCIQ) believes getting the Federal Budget back into surplus and paying down debt are essential goals but not through revenue measures that will slash jobs and investment.

After further scrutiny of the Federal Budget it is abundantly clear just how worse of the Australian business community will be as a result of the revenue measures proposed.

The Federal Government are giving with one hand but taking much much more with the other.

For example in 2013-14 the Federal Government will lower the Company Tax Rate worth $2 billion and implement the small business instant asset tax write off and simplified pooling worth $1.03 billion.

This superficially seems a pretty good deal for business. An extra $3 billion in businesses pockets to invest and employ more Australians.

However on the other hand they are seizing a resource super profits tax worth $9 billion in 2013-14 and increasing employer super contributions that will eventually be worth at least $20 billion.

It is glaringly obvious how worse off the Australian business community will be as a result of the RSPT wrecking ball and the 3 per cent superannuation guillotine on jobs.

The Queensland business community time and again comes to us telling us that the solution to balancing the budget and paying off debt lies in fiscal discipline.

There is enormous fat within the Commonwealth Budget that can be trimmed.

Capping Federal Government expenditure in real terms at 2010-11 levels saves at least $16 billion per year from 2013-14.

This could be used to do away with the RSPT that will ripple through the entire economy costing resource sector jobs and investment and in turn small business wellbeing.

In respect to increasing national savings Ken Henry has it right when recommending removing taxes on super contributions to promote additional voluntary payments.

At the same time Australia should adopt an increasing international norm of soft compulsion for employee contributions. That is all employees provide 3 per cent of their salary unless they opt out of the arrangement.

These areas just the tip of the iceberg in terms of alternative solutions to two proposals that will take Australia's economic recovery of its rails.

Do not implement an RSPT, do not increase employer super contributions and decouple the Federal Budget surplus and business assistance measures from the RSPT.