Australian Industry Group calls for a company tax cut
A KEY business lobby group has called for investment rather than government cuts to weather the financial storms.
As part of its pre-budget submission, the Australian Industry Group has called for a company tax cut and increased infrastructure spending to help stimulate the economy.
Among the 330 companies responding to a survey for the submission, most businesses in Queensland and New South Wales said increased infrastructure spending was their highest priority for the coming budget.
Outside of Queensland, NSW and Victoria, just over half of the respondents said a company tax cut was their highest priority.
It comes as Treasurer Wayne Swan prepares to bring down his sixth budget next week, which will likely include cuts across many portfolios as the government tries to consolidate its fiscal situation.
But the industry submission also warned against austerity measures that could affect a further economic downturn, measures which Opposition Leader Tony Abbott has advocated in the lead up to the election.
AIG chief executive Innes Willox said the survey showed Australian businesses had a clear preference for stimulatory spending to build productivity, rather than excessive budgetary restraint.
"The report shows that the top budget priorities for business are reducing the company tax rate and increasing infrastructure spending," he said.
"It shows that business believes that in this current economic environment balancing the budget is not the main game."
Mr Willox said almost five of 10 businesses surveyed rated balancing the 2013-12 budget as a lower priority than reducing the company tax rate, increased infrastructure spending, workforce training and incentives for research and development.
"There is a growing and very real concern that an excessively contractionary Budget in 2013-14 will not only further slow the economy but will also put downward pressure on future growth and therefore on future taxation revenue collections," he said.
"This would be a worse outcome for both the Federal Budget in 2013-14 and for the public sector debt position."
Among the other measures businesses surveyed wanted to see in the budget was reducing energy costs through electricity market reforms; aligning the carbon price with overseas markets and increasing migration for 2013-14 from 190,000 to 200,000 people, particularly for skilled workers.