The Budget?s focus is on infrastructure investment and skills to support growth. It proposes an enhanced governance role for Infrastructure Australia ($36 million over four years) and will invest $28 billion in roads over the six years of the Government?s current Nation Building Programme. This includes an additional $1 billion to accelerate the Pacific Highway duplication and a $400 million regional infrastructure fund (contingent on the passage of the Mineral Rent Resources Tax in the life of the new Senate, which sits from 1 July).
Wayne Swan committed $3 billion in new skills initiatives over six years, including the $558 million National Workforce Development Fund (which should deliver 130,000 training places over four years, with co-investment from industry) and $1.75 billion for a national agreement with State and Territory Governments to drive reform in the vocational education and training sector, effective over five years from 2012-13. Approximately $200 million will assist industry over four years to develop strategies to support competency-based progression of apprentices and to provide mentoring support services to apprentices. The Government also boosted skilled migration levels and streamlined the processing of temporary skilled migration visas to address the skills shortage.
Australian industry?s response to the Budget was predictably mixed, even apathetic. There was support from industry bodies, including the IQA and SkillsDMC, for the framework to address the country?s chronic shortage of skilled labour and vocational education initiatives. Paul Sutton, General Manager of the IQA, said the Budget announcements gave a ?substantial commitment? to ?a partnership with industry in addressing Australia?s skilling needs now and into the future?.
?The Government?s focus on a clear direction for industry to pursue is welcomed by the IQA,? Paul said. ?That attribute, aligned with the intent to drive national reform and boost skills and productivity, including in the vocational education and training sector, is central to achieving the Government?s initiative.
?The IQA welcomes this commitment and acknowledges the Government?s underpinning support of industry leadership in identifying the priorities for Building Australia?s Future Workforce.?
Ray Barker OAM, chairman of SkillsDMC, similarly acknowledged the ?clear direction for industry, Governments and training providers to work in partnership? for Australia?s long term prosperity.
Overall, other industry bodies gave qualified support. Ai Group was disappointed that funds were not committed to innovation, business capabilities and exports to offset the risks to the lopsided economy. The Australian Chamber of Commerce and Industry remarked that it was ?disappointing but not surprising that there are no major tax reform changes?. The Minerals Council of Australia commended the Budget for its focus on skills, skilled migration and targeted regional infrastructure spending but was critical that it did not outline ?a strong productivity agenda in areas like project approvals, infrastructure and regulatory reform and to signal the importance of flexible labour market arrangements to secure gains from future mining investment?.
The Government has probably received more of a pass mark than it deserved but not the breather it hoped for. Clearly it has much work to do to re-earn the business community?s faith. The one thing in its favour is that the Opposition is in a policy vacuum (Tony Abbott?s Budget reply speech was high on rhetoric but short on substance) and the Coalition is yet to receive meaningful industry support for its ?direct action? climate change policy. The announcement of the carbon tax framework in July will be the true test of the Government?s mettle ? it will need to finely balance the demands of industry with the expectations of a cynical electorate.