Business leaders and construction groups have welcomed the Federal Government’s $42 billion stimulus package, saying it will create jobs and provide long term growth.
The package, which will fund the installation of roof insulation materials for around 2.7 million homes, also provides rebates for solar hot water systems for homes that already have insulation.
Peter Gerster, who owns and manages Melbourne-based insulation business Golden Fleece, says he was extremely pleased with the package.
“I’m very happy. Very happy for myself, and also for the industry. Not only that, but it’s going to save people a lot of money, those who can’t really afford insulation. It will help our business, that’s for sure.
“It’s just the matter of coping with the work now, but it’s probably going to double our business.”
The stimulus package also has a large focus on infrastructure, with $14.7 billion provided for school modernisation projects, such as providing libraries and halls.
Other building projects include the construction of 20,000 new public housing units and repairs for regional roads, boom gate construction and general infrastructure improvements.
Ron Silberberg, managing director of the Housing Industry Association, claims the package will help create thousands of construction jobs and reduce Australia’s carbon emission levels.
The Business Council of Australia also praised the focus on construction, saying the package will fund the infrastructure projects needed for long-term economic benefits.
“Importantly, in doing what is needed to support growth and jobs now, the Government is seeking to limit the longer-term impacts on the budget and future growth and prosperity,” chief executive Katie Lahey says.
Australian Industry Group chief executive Heather Ridout welcomed the infrastructure spending, and said the $2.7 billion tax break for investment in capital assets is also a boost for small businesses.
“The big boost to housing and education infrastructure spending is particularly welcomed. The emphasis on new capital works together with comprehensive maintenance programs will deliver lasting benefits and again much needed support to jobs and business activity.”
Meanwhile, retailers have welcomed the tax bonus portions of the package, which provide $950 in cash for taxpayers who earned under $80,000 for the 2007-08 financial year.
Richard Evans, executive director of the Australian Retailers Association, says the stimulus is welcomed but recipients of the cash bonuses are now responsible for stimulating the economy.
“Economic recovery is in the hands of Australian workers at the moment. If they spend the Government stimulus package they will save their jobs; if they save it or spend it irresponsibly all working Australians will suffer. That is the clear responsibility that comes hand-in-hand with the Government’s bonus.”
But the positive reception wasn’t unanimous. Council of Small Businesses of Australia chair Bob Stanton says that while the package does provide benefits for the economy on a large scale, the Federal Government needs to put more focus on to smaller businesses.
“It’s positive, there are some things in there for small business and they will appreciate those. It generally seems to be a macro-economic package rather than micro, and they need to get down to a position where it is really helping small businesses significantly,” he says.
“Their business packages so far have been credible; it’s all aimed to stimulate the economy, but small business seems to be… they’re not being left out… but they need to be looked at more of a micro-economic level.”
Ian Campbell, managing director of diversified manufacturer GUD Holdings described the package as a bold and positive initiative, but has some concerns about the prospect of a long-term budget deficit, particularly if the Government is forced to launch further stimulus measures.
“I think the only negative is the potential for a long-term deficit position and the depth of that deficit.
“Until the banks start lending to each other, I think we’ve got a way to go in this downturn.”
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
