Here is what some of Australia's most well known economists, financial institutions and business groups had to say immediately after the Federal Budget was handed down.
NSW Business Chamber
PwC - Luke Sayers, CEO
“Whilst you could describe this budget as beige, it includes a number of important measures that will lift productivity and drive growth by encouraging workforce participation and supporting small businesses.
“Small businesses and start-ups will benefit through the reduced corporate tax rate and being able to immediately deduct professional costs associated with starting a business.
“However, if the two tiered corporate tax system is maintained over the longer term, the risk is that it could stymie growth as companies try to avoid the threshold that tips them into the higher tax bracket. We support a steady transition to a single, low corporate tax rate for all companies.
“This budget also aims to encourage more women to either re-enter the workforce or remain in the workforce through greater investment in child care."
CommSec
"In the short-term, much depends on getting budget measures through the Senate. Ongoing failure to implement budget measures risks losing support of foreign investors and puts at risk Australia’s AAA credit rating.
If the federal budget plays its role in working to improve business and consumer confidence, then there is a greater chance of firmer economic growth, meaning lower unemployment."
ANZ
"There are some worthwhile measures that may encourage higher workforce participation, such as the changes to child care arrangements and bonuses to employers hiring older workers. But the hard task of replacing bad taxes with more efficient ones and simplifying messy state-federal relations has been left for another day. The Government conveniently has been able to lean on yet unfinished White Papers on Federation (due 2016) and Tax (due end 2015) for this Budget’s lack of reform."
We are comfortable with the economic assumptions underlying the budget near term, but see the risks to the medium-term forecasts as firmly to the downside as real GDP is projected to grow above trend, at 3½%, over the five years from 2017‑18 to 2021‑22. An ageing population and a lack of productivity-enhancing economic reform will constrain growth unless future budgets or economic developments help offset these."
Standard & Poor's
"Standard & Poor's Ratings Services said today that its unsolicited ratings and outlook on the Commonwealth of Australia (AAA/Stable/A-1+) are not immediately affected by the government's budget for the year ending June 30, 2016.
The Australian government's fiscal 2016 budget, released today, projects moderate budget deficits that are likely to gradually decline over the four-year forecast period ending June 30, 2019. These deficits are somewhat larger than projected in the government's May 2014 budget and the December 2014 budget update, primarily reflecting further sharp falls in Australia's key export commodity prices and the flow-on impact on government revenues.
Nonetheless, Australia's budget performance over the next few years appears likely to improve, underpinned by spending restraint. While weaker, these revised budget forecasts remain broadly consistent with our base-case assumptions that deficits will be moderate and declining. We continue to anticipate that net general government debt will remain low relative to GDP."
Moody's Investors Service
"The measures and forecasts announced in Australia’s budget today are in line with Moody’s own expectations, which underpin our stable outlook on Australia’s Aaa rating.
The budget reflects a challenging economic backdrop. Given the current context of slowing growth, the government has refrained from measures to accelerate fiscal consolidation, as this would likely further dampen the growth outlook. In fact, the government has introduced additional spending measures (the Jobs & Small Business Package; and the Families Package)."
Association of Superannuation Funds of Australia
"The Association of Superannuation Funds of Australia (ASFA) says the community will be happy to see that the government has kept its promise to not make any unexpected, detrimental changes to the superannuation in this Parliamentary term.
Measures, such as making it easier for members to be reunited with their lost and unclaimed super, and changes to child care rebates to make it easier for women to return to work, will also provide a significant boost to the retirement savings of hundreds of thousands of people in the community."
