Federal Treasurer Wayne Swan might have promised a tough budget, but he still managed to find small amounts of cash for almost every sector of the economy, including a number of important initiatives for small business.
With this in mind, let’s take a sector-by-sector look at what the budget brought for entrepreneurs.
While there was nothing specific for this sector, the sheer number of small government initiatives unveiled by Swan will ensure there is plenty of Government advertising work to fight for over the next 12 month. The sector should also take note of extra funding for the Australian Communications and Media Authority – no doubt at least some of this will be used to expand ACMA’s spam monitoring capabilities.
Other than some minor extensions to drought relief measures (which have now almost run their course) there was little direct help for the agribusiness sector in this budget. However, the more than $4 billion pouring into regional development – in the form of improved transport infrastructure, better health facilities and better education facilities – should help farmers in the long-term. Measures that will see migrant workers directed to regional areas will also be welcomed.
One of the clear winners from this budget. With money pouring into infrastructure projects (including rebuilding efforts following Australia’s natural disasters) over the next decade, and the resources boom Mark II in full swing, construction and engineering groups should have plenty of opportunities to win new business. But almost more importantly, the Government’s $3 billion skills package will go at least some way to solving the sector’s biggest problem – people. The Australian Contractor’s Association has welcomed the creation of the $558 million National Workforce Development Fund and the more than $200 million for apprentice training and support. However, the ACA was less impressed with a requirement that construction companies report payments to contractors – it sees this as part of a wider Government crackdown on the use of independent contractors.
Accountants and financial planners will be welcoming the Government’s move to relax penalties for first-time breaches of excess superannuation caps, although they will be less pleased with the closing of a loophole that allows the wealthy to stream income to their children tax free. However, the biggest long-term win for the financial services sector came from moves to make it more attractive for investors – institutional and retail – to invest in infrastructure projects of national significance. There are detail still to be worked out around this, but you can just hear investment banks and fund managers licking their lips.
The budget has less money for pathology services and a lack of extra funding for new drugs, but it’s hard to see the health sector as anything other than a winner from the budget. Next to the skills package, the new $2 billion mental health package stands out as the biggest initiative in this budget. There was $492 million for early intervention, $571 million for better co-ordination of mental health services and $220 million for mental health care outside of hospitals. Even mental health expert John Mendoza – who famously quit last year as a mental health adviser to the Government – has backed the plan.
The Australian Information Industry Association described the budget as “providing a solid foundation for the development of the digital economy” but says its main focus is the release of the Government’s National Digital Economy Strategy, due later this month. “There are some good smaller commitments in this budget that focus on citizen engagement and building community confidence, however we need to deliver much more,” chief executive Ian Birks said last night. The AIIA was particularly keen to see more support for skills in IT and wants to see what more can be done to ensure technology issues are considered in all initiatives, such as increased health spending.
Not surprisingly, the Government remained very much focused on the NBN in this budget. In the 2011-12 period, the Government will pump $3.1 billion in equity in to the NBN Co., as part of the $18.2 billion it will hand over during the next four years. The Government also said it will consider “financial support arrangements” to facilitate a deal between Telstra and the NBN. One little titbit contained in the budget papers involves a $10 million Government scheme to encourage ISPs to develop voluntary internet filters – the program has been dumped due to a lack of interest in the grants.
The poor old manufacturing sector might be getting whacked by the strong Australian dollar and patchy economic conditions, but Wayne Swan has thrown the sector a few bones in the budget. The sector should be one of the primary beneficiary of the skills package’s focus on apprentices and training and it is also the focus of a $34 million “buy Australian” program that will seek to increase the level of involvement Australian manufacturers (particularly smaller one) have in big resources projects. For this sector, every little bit helps.
Documentary makers enjoyed a nice bonus from this budget, with $11 million in new funding that will be directly used to fund the production of new docos. This spending was part of a $56 million package to help the film industry, including $43 million to boost production, $2 million for a survey of the sector and a rework of tax arrangements to make it easier for film makers to claim grants to offset production and post-production expenses.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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