Australian Treasurer Joe Hockey has delivered the country's budget, promising to help small businesses and ensure parents can join the workforce.
Academics from UNSW Australian Business School gave their independent analysis in a live podcast round table, introduced by James Morley and moderated by Julian Lorkin, with reaction to key budget measures at the BusinessThink 2015 Budget roundtable.
“I call it the Dr Strangelove budget, or how Joe Hockey had to stop worrying and learn to love the deficit,“ said
, a Professor of Economics and Associate Dean (Research) at UNSW Business School, during the Budget Round Table.
“With political constraints on cutting spending and no appetite to raise tax rates, a deficit was always inevitable—indeed, it is an algebraic necessity. And Joe Hockey seems to have embraced the downright Keynesian notion of deficit-financed temporary investment tax cuts for small businesses to stimulate the economy. This should give the RBA some breathing space in terms of not having to lower rates further. Meanwhile, in terms of last year’s narrative of a budget ‘emergency’, all I can say is it’s amazing what a difference a year can make.”
Professor John Piggott,
the Director of the ARC Centre of Excellence in Population Ageing Research added that older workers are winners. The budget added $10,000 payments over 12 months to employers hiring over 50s who have been unemployed for six months.
“It is very important that mature age participation in this workforce is increased,” he told the audience who watched the recording the podcast. “The problem is that it is very difficult to get back into the workforce if you are over 50. Recruitment agencies just won’t put you forward, because some companies will explicitly say they don’t want workers around this age. This will help, but if the $10,000 was used to keep people in the work force rather than just those who are unemployed, it might be an even more effective measure.”
from Taxation and Business Law at the UNSW Business School talked about the changes to paid parental leave. “What we have is a package that is targeted at working mothers. They will benefit from this.”
“The Government is amending the general anti-avoidance rule to get foreign multinational companies back into our system by deeming them to have a required ‘taxable presence’ in certain circumstances,” said Associate Professor
, when discussing a new tax rule to prevent companies from moving profits overseas.
“The OECD is doing a lot of work on the issue and they want every country to adopt the OECD standard that emerges. Australia, through this unilateral measure, is chipping away at the OECD benchmark and the desired global consensus, and that is going to be a problem. This could give rise to lobbying, especially from the US, for the Australian government to back down on this measure.”
Scientia Professor, Director, ARC Centre of Excellence in Population Ageing Research (CEPAR)
School of Economics