While there was nothing specific for the sector in the budget, Australian Industry Group chief Heather Ridout is pleased with the extra funding for the Export Market Development Grant and the restructuring of tax breaks for R&D spending, although this won’t take effect until 2010-11.
Australia’s television sector received a small boost with $23.4 million to be spent over four years to assist with the introduction of digital television. The Australian Broadcasting Corporation will also receive an extra $150 million over three years to fund a children’s digital television channel and fund more production of local drama.
Nothing specific for this sector, but as with the financial services sector, tax experts can expect to see their appointment books fill up with clients eager to learn more about tax changes, including the tax treatment of hobby farms and holiday houses and the treatment of employee share schemes.
On top of the infrastructure spending, the Property Council of Australia has received a real boost with the Government’s decision to extend the enlarged first home buyer grant for three months at its current level, and until the end of the year at a slightly lower level.
Property experts had been concerned that the sector was headed for a slump if the grants ended on 30 June, but the gradual reductions should help ease the pain.
“The timing for the boost to wrap up dovetails well into the ramp up of Government spending on the public housing front, which will guarantee that jobs across the construction sector are secure,” says Caryn Kakas, executive director of the Property Council’s Residential Development Council.
Resources and energy
The mining boom might be over, but the sector actually fared pretty well in the budget. There was money for key mining infrastructure including rail and ports, and $2 billion to invest in clean coal technology. Of course, the resources and energy sector will be sweating on next year’s budget, which will see the introduction of the emissions trading scheme.
While the big boost for pensioners in this year’s budget is questionable from the point of view of speeding up Australia’s economic recovery, an extra $30 a week in the pockets of pensioners should stimulate some activity for the retail sector.
However cuts to so-called middle class welfare could leave some more affluent shoppers with less spending power. Australian Retailers Association executive director Richard Evans is less than impressed that the Government did not make some hard decisions on budget savings.
“Retail budgeting 101 states that if recurrent revenues decline then recurrent spending should also be reduced. We see little evidence of this in the federal budget, with the Government failing to make the hard decisions to reign in their spending.”
Like the IT sector, the telco industry got its budget gift early in the form of the national broadband network. However, the sector may not be happy with the extension of the Do Not Call register, which will largely be funded by the telecommunications and marketing sectors.
This industry is one of the bigger winners from the budget, with $8.5 billion to be spent on rail, road and port projects. Australian Trucking Association chairman Trevor Martyn says the billions of dollars pledged for road improvements will improve safety for drivers and lower running costs.
He also argues the spending will mean benefits for consumers. “Better roads lead to lower costs at the supermarket checkout, because the trucking industry delivers every item in every Australian’s supermarket trolley.”
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.
