Business left to plug budget holes: ACCI
- 23 October, 2012 10:12
Business is again being asked to do the heavy lifting to plug the holes in the federal budget despite falling profits, industry groups say.
In an update to the May budget released on Monday, Treasurer Wayne Swan announced $16.4 billion in savings to allow Labor to reach a promised surplus in 2012/13 and the next three years.
The update included plans to change the timing of company tax remittances to the government to a monthly rather than quarterly basis from January 2014.
The change, which will smooth government tax receipts and create a revenue gain of $8.3 billion over three years, will be made in three stages for companies turning over $1 billion, $100 million and $20 million a year.
"Business has to do the heavy lifting once again," Australian Chamber of Commerce and Industry (ACCI) director of economics and industry policy Greg Evans told reporters in Canberra.
Mr Evans said business was facing a "double blow", because smaller companies would have to remit taxes more frequently after they missed out on tax cuts granted to large enterprises in the May budget.
"Once again we are seeing business is firmly in the government's firing line when it comes to helping out the budget bottom line," he said.
"This is going to have a negative impact on our competitiveness."
Mr Evans said the policy decisions in the mid-year economic and fiscal outlook were a negative for household and business confidence.
Given the negative backdrop of a gloomy global economy, the federal government's outlook for domestic unemployment of 5.5 per cent this year could be too optimistic, he said.
While the ACCI supported a budget surplus, the government needed to take current economic circumstances into account, Mr Evans said.
The Australian Industry Group said there were risks in calling on business to provide the "lion's share" of the budget savings.
"At a time when the economy is slowing and profitability is falling, this over-emphasis on squeezing more out of companies will detract from the business community's ability to get on with the job of reinvesting and creating employment opportunities," AiGroup CEO Innes Willox said in a statement.
The Institute of Chartered Accountants Australia head of leadership Yasser El-Ansary said the budget forward estimates for revenue collections were probably too optimistic.
"We could see further writedowns to revenue as part of next year's full budget in May," Mr El-Ansary said in a statement. "In early 2013, the government's razor gang is probably going to have to do some more work on spending cuts and tax increases if they want to deliver a budget surplus."