Federal Budget 2014: SMBs the winners in Hockey's 'horror' show

Federal Budget 2014: SMBs the winners in Hockey's 'horror' show

But if you're poor, unemployed, sick or a pensioner you'll feel the pain

Small and medium-sized business is the big winner in the 2014 Federal Budget delivered by the treasurer, Joe Hockey.

The former Minister for Small Business from 2001-2004 in the Howard Government lived up to his past by looking after the SMBs but delivered a budget that largely lived up to its hype but hit hardest the people who can least afford it.

And while that does not directly concern the channel, it does warrant a moment's pause to consider that a person earning $200,000/year will face paying an extra $7.70 tax/week while the sick face a $7 increase for GP visits, pensioners face concession cuts, young unemployed (under-30s) will wait six months before becoming eligible for a reduced dole ($255/week); and single income couples with children stand to lose considerably more under cuts to Family Tax Benefit B. And there will be cuts in funding to hospitals.

Small and medium business stands to gain from a 1.5 per cent company tax cut and no parental leave levy. Businesses will benefit from a new rate of 28.5 per cent from July 1, 2015. This is good news for a channel that has heard plenty of stories of financial struggle over the past year.

The Coalition hints in its own platform marketing that this cut may lead to higher wages. This remains to be seen as businesses deal with other less endearing Budget promises

The news is not so good for NICTA. Its government funding will end in June 2016 and it will be forced to stand on its own feet.

ICT companies supplying Federal Government departments can also start to worry. At least 16,500 full-time jobs in the public service will go in three years. That is a lot less seats and may flag smaller contracts.

And it's hard to see much that will stimulate the retail sector either.

Elsewhere, AAP reports more than $800 million in industry support programs have been axed, with the federal government declaring businesses will stand or fall on their own abilities.

Federal Treasurer Joe Hockey's $845 million worth of cuts will be delivered mostly by trimming support payments to the auto and renewable energy sectors.

The government argues that assistance policies have failed, with employment in assisted sectors falling over the past decade, even as government funding increased.

Australian businesses are estimated to receive more than $10 billion in annual assistance from the federal government.

"We will refocus our effort on innovation and self-reliance," Mr Hockey said in his budget speech.

"Businesses should stand or fall on their ability to produce the goods and services that people actually want."

But the government will spend more than $1.4 billion on boosting employment and skills, and help companies to become more competitive.

That includes $485 million to establish an Entrepreneurs' Infrastructure Programme to develop and commercialise business ideas and a $476 million fund to pay for skills training being sought by employers.

The government will offer loans of up to $20,000 to apprentices and will spend $50 million to pay manufacturers to shift to higher value and growth markets.

It has also allocated $161 million for spending on science and research projects and will invest more than $125 million to support the resources and energy sectors.

But if you're looking for inequities or peculiarities look no further than the $245 million over five years that has been set aside for school chaplins and $1 million for ballet student's boarding accommodation.

UPDATE: NICTA responds to funding cut

A NICTA spokesperson commented that that NICTA had been a real success story, rapidly growing its commercial revenue, working closely with large and small companies to transform their business models and spinning out new technology companies at a rate of one every three months. These companies will create the future new industries and jobs for Australia.

"We welcome the commitment to continue NICTA's funding over the next two years," the spokesperson said in a statemnent..

" NICTA is discussing funding models with our stakeholders, future investors and partners that will support the unique world-class organisation that it has developed into - a model that is now being copied around the world.

" Australia has a competitive advantage in this area and some of the best ICT researchers in the world - people who will make the big discoveries that will change the world, like Wi-Fi. This includes data analytics, cybersecurity software, machine learning and optimisation.

"Information and communications technologies (ICT) are among the most powerful accelerators of human advancement in the 21st century. Nearly all medical research breakthroughs – think of the bionic ear, pacemakers, new treatments for diseases and implants for chronic pain - involve fundamental research breakthroughs in ICT. "

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Tags small businesssmbnictajoe hockeypublic serviceFederal Budget 2014

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