The federal budget should boost business confidence, but promises to cut the corporate tax rate need to be delivered on, the Australian Chamber of Commerce and Industry says.
Chief executive Kate Carnell said incentives for small businesses in particular would boost investment and job creation, but a tax on high income earners and a proposed paid parental leave scheme are of concern to businesses.
"The challenge for the government is now to fulfil the important promises outlined in the budget, particularly where recent governments have failed to deliver on major fiscal targets," she said.
"Once the budget position repairs, the government should move as soon as possible to repeal temporary revenue measures and aim to reduce income taxes closer to company tax."
About 800,000 businesses will benefit from a company tax cut from mid 2015, under measures outlined in the budget papers.
Australian Industry Group chief executive Innes Willox welcomed measures to strengthen the budget's bottom line, but warned they could also cause economic pain.
"With the economy at a pivot point characterised by fragile confidence, flat lining productivity and below trend growth, the budget also carries some risks to Australia's short term economic health," he said.
Massive new infrastructure spending could help to re-balance the economy, if carried out responsibly, Mr Willox said.
"Properly managed and prioritised, this spending can assist in raising productivity while absorbing some of the capacity that will be released as major mining projects wind up," he said.
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