The reaction to Scott Morrison’s second budget is that it is politically smart, despite it failing to rein in spending. The AICD’s view is that the ‘lifters and leaners’ has been replaced by ‘politics and polls’. Reactions from key stakeholders are summarised below.
|“The government’s significant change of tack on Medicare and schools funding is welcome, recognising that people value essential services.” – Australian Council of Social Service
||“Treasurer Scott Morrison turned up with the wrong budget. This budget should have been about investment growth and incentive to help the country grow its way out of deficit. Instead, his budget uses a windfall in commodity prices to keep Australia's decade old habit of spending over-optimistic revenue forecasts” – Australian Financial Review
|“Tonight's Federal Budget takes steps towards making government programs more sustainable while offering welcome support to small businesses so they can continue to grow and create jobs.” – Australian Chamber of Commerce and Industry
||“A new tax on major banks in the Federal Budget is a tax on the economy…. It is a direct attack on jobs and growth, not just a tax on the five largest banks. It will hit Australians by hurting investment and could have unintended consequences.” – Australian Bankers Association
|“This is a bold budget that faces up to the reality of a parliament that wants tax increases rather than spending cuts. Scott Morrison is abandoning unpopular savings that are blocked in the Senate and imposing two big taxes to take their place — a hit on the big five banks and a Medicare levy increase that hits millions of workers.” – The Australian
||“There's no serious, and difficult, reform in this budget. There is little effort to tackle how to better spend $464 billion in taxpayers' money. There are plenty of new taxes - in fact $20.8 billion - but they are overly reliant on big corporates and pay-as-you-go income taxpayers. Tax reform has effectively stalled and, without it, there's little security around the financial outlook for Australia.” – Sydney Morning Herald
|“Treasurer Scott Morrison has delivered a practical and workable Budget in the face of sustained political gridlock in Canberra that has stifled much-needed, wider reform.” – Business Council of Australia
||“There are significant new imposts on businesses who need to sponsor skilled migrants to bolster and train their workforces. This will add to costs, prices and will put pressure on business margins. The new levy on banks is unfortunate. It is likely to see financing costs rise across the economy and it could open the way to arbitrary imposts on other sectors.” – Australian Industry Group
|“This budget is an overt political exercise and a clever one. It solves problems for the government and creates them for the opposition.” – Phillip Coorey, AFR Chief Political Correspondent
||"This is the Star Wars: Rogue One budget - the government has the plans but it hasn't yet tackled the debt star." - PWC Chief Economist Jeremy Thorpe
Last night, AICD Chief Economist Stephen Walters provided his thoughts on the budget and what directors need to know. You can read Stephen’s updates here.
Stephen will also be presenting a webinar discussing the budget and will offer crucial insight to our members that impact their decisions as directors. The webinar starts at 12.00pm Thursday 11 May, click here to register.