BUDGET SPECULATION ALL ‘DOOM AND GLOOM’
Written on the 10 May 2011
WHEN Treasurer Wayne Swan (pictured) releases his budget tonight, Queensland small businesses will be looking for tax breaks, the mining industry will be hoping for concessions and one expert says neither should expect too much.
Members of the struggling film and television industry are looking for some good news as they continue to battle against a high Australian dollar and lack of Federal Government interest.
Film workers are hoping a campaign and petition calling for an increase in tax breaks for productions will be included. The media entertainment and arts alliance has appealed to Arts Minister Simon Crean to double the location offset designed to lure international productions to Australia.
Professor of Economics at Griffith Business School Ross Guest, says businesses shouldn’t expect much from this budget for two reasons.
“First, there’s not much to give because of the need to reduce the deficit and a weak revenue stream caused by the slump in company tax revenues, in turn due to the rising Australian dollar," he says.
“Second, this government has made it clear over the last few years that its priorities are redistributing income and wealth to ‘disadvantaged’ households. It's shown a willingness to introduce new taxes on business such as the mining tax and carbon tax. We'll probably also see an increase in FBT on company cars and an excise tax on LPG.
“The increase in skilled migrants is good in principle but the size of the increase will turn out to be very small. Many of the migrants will be family members who will not be workers. And a number of the new workers will in fact already be here on temporary work visas. So the net increase in workers might be only a couple of thousand which is a tiny number when spread across the whole economy.”
Partner at Deloitte Darren Lee predicts the budget will be tough with few concessions, particularly in the mining industry.
“There’s been a lot of discussion and speculation about the mining tax recently, but all we know is the government’s working towards releasing draft regulations, so I don’t think there’ll be anything new in the budget regarding the mining sector,” he says.
“Mining companies have made their feelings known about the tax and have been hoping for some concessions regarding exploration in particular, but at this stage there’s no new incentives proposed for smaller mines, which is disappointing to them.
“It’s tough because smaller mines need to raise capital, so they’re always looking for incentives but having said that, there are a range of different mining profiles out there.”
Stay posted for a Gold Coast Business News budget update tomorrow with comment from former Prime Minister John Howard.