Education, the knowledge economy and the Asian Century.
- $9.8 billion from 2014-15 will be welcome news for our schools and school teachers but Asian literacy barely rates anything but a cursory mention in this Budget.
- The $97 million earmarked for additional university places for nursing, teaching and Asian languages represents only around 1,650 places per year. It does virtually nothing to meet what is required if we are to truly seize the opportunity that the Asian Century presents.
Infrastructure and productivity
- The proposed investment in roads, rail and cities is very encouraging.
- But we note that there are no funds for the proposed infrastructure investment in 2013-14, and the remainder of the funds are contingent on:
- State government investment; and even,
- Private sector investment.
- As a nation with large distances between cities and a large distance from major markets, we simply must invest in creating world class infrastructure in order to move goods and people around as quickly and as cheaply as possible.
Capping of self-education deduction to $2,000 per annum
- If our professionals and tradespeople are to be of the highest standard, they need to not only have a strong underpinning education but commit to keeping up to date through lifelong learning, then capping of self-education expense claims runs counter to this and reduces the ability of Australians to compete in global markets.
- It will also be a hit to universities, TAFEs amongst others.
- We do not believe the implications have been fully thought through.
Australian businesses and competitiveness
- If Australian businesses were expecting a tax cut, they were deluded – and they will be disappointed Instead, large businesses will face a series of new integrity measures estimated to raise $4 billion.
- While we are strong supporters of the integrity of the tax system, this may impact business investment and further reduce the international competitiveness of our corporate tax system.
National savings and superannuation
- The Government has confirmed, unsurprisingly, its intention to proceed with the recently announced super changes.
But there is a bigger task to be done – an independent national review of savings and we are disappointed this has not been addressed as part of the budget tonight.
CPA Australia’s call to action
On 1 May 2013, CPA Australia released new research showing that Australia needs to increase its international competitiveness so it doesn’t get left behind in the Asian Century.Australia is at a tipping point. If we are to move from lucky country to competitive country, we need to be placing a greater emphasis on education and training, a more innovative, knowledge-based economy, addressing severe infrastructure shortfalls and a more competitive tax and regulatory system. CPA Australia is calling for budget initiatives in a range of areas including economic, regulatory and tax reform; international competitiveness, particularly with Asia; national savings, our retirement savings system; education and infrastructure.These are outlined in further detail below.
- We would like to see some money attached to the White Paper and Implementation Plan on Australia in the Asian Century. We believe that without significant changes in the mindset of many Australian businesses – supported and encouraged by government policies and spending – the Asian Century may bypass Australia.
- The budget should give priority to policies that encourage Australian management to improve their knowledge of international markets, particularly of Asia, and developments in technology.
- The goal of making the study of a priority Asian language an option for all school children by 2025 is too little too late. We would like the budget to fund a detailed study into implementing compulsory Chinese language study for all Australian primary and secondary students, including when it can be achieved. The long-term objective should be to have all high school graduates with fluency in Chinese.
- The budget should give priority to funding additional annual in-Asia study opportunities for at least 10,000 Australian tertiary students at universities in Asia as part of their Australian degree.
- We do not support any cuts to the R&D tax concession as this would appear to undermine the aspirational goal detailed in the government’s Australia in the Asian Century White Paper of Australia becoming one of the “top 10” innovators in the global economy.
- The budget should fund as a priority improvements to the capacity of government agencies to benchmark Australia’s policy performance against non-OECD economies from the Asian region.
Economic and tax reform
- The budget should give priority to policies that create incentives and remove disincentives for the reallocation of labour and capital to growing areas of the economy.
- We would like to see the budget give a commitment that the Government will subject all new proposed regulation to reviews that determines the cumulative impact of the proposed regulation on those being regulated and its impact on the international competitiveness of those being regulated.
- We would like to see the budget set out an explicit commitment and target for the reduction of regulatory burden and such a target being incorporated into the key performance indicators of government agencies and departments and their chief executives.
- The budget should fund as a priority a cost/benefit analysis of making standard business reporting compulsory for listed entities and all ASIC lodgers.
- The budget should fund a revisiting of the Henry Tax Review recommendations and the further development of those proposals.
- To help enhance Australia’s overall productivity, and given the absence of any other plausible option, CPA Australia encourages the government – and the opposition – to consider raising the rate of GST and/or broadening the GST base in parallel with the replacement of existing inefficient state taxes.
- The budget should continue to fund policies that encourage greater workforce participation, particularly from females with young children and older workers.
- The budget should, as a priority, fund a root and branch national savings policy review. Such a review should be broader than, but include, a review of our compulsory retirement savings model. The review would also need to revisit the recommendations made by the Henry Tax Review about taxing savings.
- The higher education reforms of recent years, notably the introduction of a demand-driven system and the changes to the indexed funding of student places, should be maintained and priority be given to funding enhancements in those reforms.
- Attracting more private capital to infrastructure projects is essential to implementing Infrastructure Australia’s priorities. We would therefore like to see this budget implement the reforms proposed by the Infrastructure Finance Working Group to encourage greater private sector investment in infrastructure.