A budget for the times: Hagop's commentary on the Federal Budget

The 2007-2008 Federal Budget delivered on Tuesday night has something for almost everyone. No one, it seems, has been omitted from the gift registry of Peter Costello.

Workers get tax cuts; carers get one off payments; families finally are able to claim out of pocket child care expenses shortly after the end of the year that they are incurred; seniors and pensioners get one off payments; and there is also money for students, apprentices, teachers, our defence and security personnel; additional funds for environmentally conscious households who want to install solar panels on their roofs.

The budget will, of course, have effects upon the printing industry.The across-the-board tax cuts involve adjustments to the tax thresholds during two consecutive financial years.

Increasing after tax income should provide modest stimulus to printing industry activity. As taxpayers spend some of their additional income then there will be positive flow-on effects to the printing and associated sectors.

The multi-billion dollar investment in transport infrastructure should also have positive impacts for the industry. A more efficient transport system should ensure faster and more reliable delivery of printed matter. It also has the potential to open up new commercial opportunities for printing companies operating outside of major cities and towns.

Modest GST changes such as removing the need to issue tax invoices for purchases of $75 or less and extending eligibility for the simplified GST accounting methods to all business should help simplify compliance for printing companies and is welcomed.

With skilled labour shortages becoming an acute issue for the printing industry, the additional 5,000 funded places under the skilled migration scheme and $58.5 million in funding to assist Registered Training Organisations to work with industry and local employers to develop and implement 'fast-track apprenticeship' are also welcome initiatives for the industry.

The budget contains additional details on the initiatives announced last week including five new Australian Industry Productivity Centres with funding of $352 million over 10 years. The Centres will provide free diagnostic services to help business assess their performance against world best practice and identify opportunities for improvement. Tailored advice on critical issues such as business planning, process improvement, and lean manufacturing will also be facilitated.

Also businesses seeking technology advice or access to specialised equipment will be assisted, with the Centres meeting up to 50 per cent of the costs of professional advice up to a ceiling of $20,000.

Under the Seizing Global Opportunities initiatives $254.1 million will be made available over 10 years to fund the Global Opportunities program which will mobilise the critical mass and skills for international engagement and export success.

The initiative will target more than 30 large international projects each year with a combined value of at least $16 billion. Consortiums of Australian business will be formed to pursue these opportunities, giving small to medium size companies the chance to forge new links with Australian and international businesses.

The Government will also extend by two years the 30 export facilitators supporting Australian firms chasing new business under the Australia-US Free Trade Agreement.

The Global Opportunities Program offers printing companies a unique opportunity to become part of global supply chains and start benefiting from commercial opportunities associated with globalisation.

Tchamkertenian said it is unlikely that the initiatives announced in the budget would be inflationary and place upward pressure on interest rates.

"While some commentators are warning about possible upward pressures being placed on interest rates following the budget the new initiatives need to be placed in proper context," he said.

"Despite the new initiatives the budget surplus will remain at about 1 per cent of GDP. It is also highly unlikely that taxpayers will spend all of their tax cuts. You need to remember that household budgets are under stress and the household sector is likely to use some of the tax cuts to help retire accumulated debt," Hagop said.

Got a view on this story? Drop us a line and let us know