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Budget: Offers return to surplus but little for exporters

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Budget: Offers return to surplus but little for exporters article image
Wayne Swan delivered the Federal Budget last night with a promise to return to surplus by 2012, but industry groups say it doesn’t offer enough to help business. The Federal Treasurer said the budget was designed to deliver significant savings but also ensure no one was left out of work as the mining boom gathers pace. The focus is on providing training for the young, old, disabled and welfare-dependent to increase the workforce and help deal with skills shortages, with $3 billion allocated to workforce development over six years. "This budget gets us back in the black, gets more people into better jobs and spreads the opportunities of the boom," Swan said. Heather Ridout, chief executive of the Australian Industry Group said the focus on fundamentals was welcome, but didn’t go far enough for Australian business. "More could have been done to offset the risks to the economy due to the impact of the strong dollar on [export] sectors such as manufacturing, tourism and education, which are on the wrong side of the resource boom." The Australian Chamber of Commerce & Industry said small business had been short-changed by a budget that focussed too strongly on short-term gains. "Whether it works in the mid-to-longer term on either the productivity side or the return to surplus depends heavily on good fortune and hope." The return to surplus is reliant on the resources sector remaining strong and delivering high export earnings, despite the threat of the rising Australian dollar and skills shortages in mining states. The latest figures from the Australian Bureau of Statistics indicate Australia’s terms of trade are strong, with exports up nine percent in March, but the Federal Trade Minister has warned Australia export earnings will decline. Craig Emerson said rural exporters were already feeling the pinch of the strong dollar, with rural exports down two percent in March. The recent disasters in Japan would have a significant impact on the economy, he projected, as the devastated nation is Australia’s second-largest trading partner. "We should expect our exports to Japan to decline in the coming months." Shadow Treasurer Joe Hockey said the budget was a political document that lacked believable figures. "This is a government that needs to show it can manage the best terms of trade in Australia’s living memory." He criticised Swan for leaving out the projected costs of the carbon tax to Australian business and the revenue it is expected to deliver. "The budget will be flawed if the carbon tax is not included because the carbon tax will affect-in the so-called surplus years-the revenue figures, the expenditure figures, the inflation figures, the employment figures and the economic growth figures." Don't miss the June issue of Dynamic Export, where Craig Emerson will talk about what the budget offers exporters.

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