Treasurer Joe Hockey said that on the back of five budget deficits, the move into surplus over time would start with the abolishment of $A845 million in industry assistance programs.
“We will refocus our effort on innovation and self-reliance,” he said.
“Business should stand or fall on their ability to produce the goods and services that people actually want.
“To improve business opportunities, we are cutting company tax by 1.5 percentage points for around 800,000 businesses.
“We are abolishing the carbon tax and we are abolishing the mining tax.”
Industry Minister Ian MacFarlane said the budget underpinned the building of a globally competitive economy by setting up a kick-start in productivity and providing support that would enable businesses to back themselves while carving their places in a changing market.
“Industry policy will no longer be an overlapping plethora of small grants and entitlements,” he said.
“This new approach is based on setting the right economic environment by reducing red tape, equipping businesses with key market information and the opportunity to expand or export, and reigniting the Australian spirit of entrepreneurship.”
MacFarlane highlighted the commitment of $161 million of investment in science research, more than $125 million in resources and energy support and $100 million towards encouraging mineral discoveries.
The plan, which calls for the removal of $1 billion a year in red tape and new free trade agreements in Asia, was well received from mining industry interest groups, including the Chamber of Minerals and Energy of Western Australia.
CME chief executive Reg Howard-Smith applauded, in particular, funding for the government’s exploration development incentive, which will allow investors to deduct a portion of exploration expenditure against their taxable income.
“All resources projects begin with a discovery and to that end, CME welcomes the funding for the exploration development incentive, which honours a Coalition election commitment,” he said.
“To establish a future pipeline of projects, we rely upon increasing the current level of exploration activity here in Western Australia.”
Howard-Smith joined Queensland Resources Council chief executive Michael Roche in supporting the budget’s infrastructure spending package of more than $125 billion, including $50 billion in spending by the end of the decade.
Roche, however, described the budget as a “mixed bag”, welcoming a scheme aimed at encouraging trades training but expressing concern over nearly $500 million in cuts to carbon capture and storage technology development.
“It is clear that CCS technology development is not so much an option but a necessity in seeking to extend energy security globally while reducing the intensity of greenhouse gas emissions,” Roche said.
“Also of special interest to the resources sector are proposed net savings to indigenous affairs programs and we will be seeking more details on the impacts on employment opportunities for indigenous communities in remote and regional Queensland.”
The Association of Mining and Exploration Companies rallied behind the proposed reduction of the company tax rate to 28.5% and confirmation of an end to the carbon and mining taxes but called for measures to increase the high cost of doing business in Australia.
“AMEC suggests this must go further and continues to call for the diesel fuel tax credit arrangements to be at least returned to pre-carbon tax levels as proposed in the repeal of the carbon tax package and then tied to any changes in the excise levy,” AMEC chief executive Simon Bennison said.
“Further budget-related initiatives that will reduce red tape, improve efficiency and reduce duplication in environmental approvals are all supported by the mining industry.
“This includes the implementation of the ‘one-stop shop’ for environmental approvals, which will remove duplicative processes between the federal government and those of respective state and territory governments.”
The Australian Mines and Metals Association, meanwhile, tied the “tough budget measures” to a push for reforms in workplace relations, especially concerning union rights.
“Budget policy and our employment laws affect all Australians and their job opportunities,” AMMA chief executive Steve Knott said.
“These challenges are now pressing and we cannot miss the opportunity to take action as part of accelerating the course back to a budget surplus.
“AMMA calls on the Senate to support immediate reforms on new project agreements, excessive union site entry, unnecessary strike action and lawlessness in the construction industry by restoring the [Australian Building and Construction Commissioner].”
