Business chiefs Innes Willox and Jennifer Westacott urge Abbott Government to deliver 'bold' budget

Updated

Business groups have urged the Federal Government to be "bold" as it formulates the May budget.

Prime Minister Tony Abbott made an about-face on the state of the federal budget last week when he insisted the outlook had improved, despite a string of budget savings being blocked by the Senate.

Innes Willox from the Australian Industry Group said the Government had a tough task over the next eight weeks.

He said long-term spending cuts were necessary, but with declining revenue and low confidence, business needed a boost too.

"The last thing we need as a community, and as a business community, is another year of paralysis and doubt about what the Government can do," he said.

"We need some clean air and some very clear objectives about what can be achieved over the next year to address some of the long structural problems that we have as well as driving growth for the future.

"That's got to be the priority of the budget, and then we would hope once the Government's got key measures in place it's able to sell or negotiate the majority of those through the Senate."

Now is not the time to go slow. Now is the time to be a little bit bold to set up the economy for the future. Innes Willox, Australian Industry Group

The Upper House has baulked at bold measures so far, but Mr Willox urged the Government to be brave.

He said he wanted the Government to increase spending in research and development, cut company tax and introduce accelerated depreciation for equipment to help restore confidence.

"We can't afford to stand still. We would hope that any government would be able to pick its targets appropriately to boost reform," he said.

"We need to make some bold decisions going forward because we face enormous challenges.

"We have a declining revenue base within Australia and we have concerns about slowing growth.

"Now is not the time to go slow. Now is the time to be a little bit bold to set up the economy for the future."

Effective strategies sought to reduce debt

Mr Abbott's take on an acceptable level of debt appeared to have changed too, with his recent comments that a debt-to-GDP ratio of 50 to 60 per cent was "pretty good".

Business Council of Australia chief executive Jennifer Westacott said she wanted to see modelling to prove the economy could weather that level of debt.

"Those debt levels do make the business community, but they should make the whole community, anxious," she said.

"We have to look at what debt really means. It means our capacity for weathering economic shock around the globe is weakened.

"But also, debt is something we'll just pass on in taxes to future generations.

"So we want to see from both sides, very effective strategies to get our debt down over the long term."

Ms Westacott said the business community acknowledged more modest changes might be necessary in this year's budget.

But she argued bold economic reforms must be in the Government's long-term plan to help get Australia back on track.

She said it was up to politicians in the Lower and Upper houses to make that happen.

"The whole point of the Government's agenda has got to be to get the policy design right, to get the detail right, to explain that to the community - and for the Senate - if they are going to reject things, to put up alternatives, not just bat them back," she said.

"You can't just say we're going to oppose X, Y and Z if you don't at least suggest what the alternatives might be.

"That's the importance of political negotiation."

Significant progress has already been made: Cormann

Finance Minister Mathias Cormann defended the Government's record and said significant progress had been made.

"All of the measures we have put forward, that we haven't taken off the table, continue to be on the table and continue to be pursued," Senator Cormann said.

"I mean we have made significant progress since this time last year. The budget is now in a much better position.

"Economic growth has been strengthening through 2014, jobs growth has been strengthening and this year's budget will be a matter of building on the progress we have made last year."

Senator Cormann said the Federal Government had inherited a "rapidly deteriorating budget position".

"The first budget of a new Government is always significant because it obviously involves a significant change of direction," he said.

"We have pursued our policy agenda to strengthen economic growth, to strengthen jobs growth and get the budget back on track and back under control."

He said spending growth had been constrained to 1 per cent above inflation, down from "about 3.6 per cent under the previous government".

"There is more work to be done and we will do that in an orderly and methodical fashion. Every budget is a four-year planning document," Senator Cormann said.

Topics: budget, federal-government, federal-parliament, business-economics-and-finance, australia

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