Increased spending on infrastructure has emerged as the top priority for businesses in the building industry, according to the latest survey of nearly 400 business leaders.
Releasing its Business Priorities for the 2014/15 Federal Budget survey – in which 364 business chief executive officers of companies of varying sizes across a range of sectors were asked to rank six policy objectives according to their importance – Australian Industry Group (Ai Group) reported that overall, reducing the company tax rate was considered the most important priority, followed by higher spending on infrastructure and bringing the budget back into surplus over the medium term.
Of the 84 leaders surveyed from the construction sector, however, beefing up investment in transport, energy and other types of infrastructure was considered most important, with 29 per cent ranking this the highest priority for their business and 60 per cent ranking it in the top three.
This just edged out reducing the company tax rate, followed by bringing the budget back into surplus over the medium term and upping spending on training and apprenticeships, while construction industry leaders were less concerned about nearer term fiscal balance or increasing tax concessions for research and development.
The latest results come amid media reports suggesting up to $10 billion in federal government assets could be sold to pay for new road and rail investments.
According to News Corporation reports, assets such as Australian Rail Track Corporation and Defence Housing Australia could be put on the block, with all proceeds going into major infrastructure projects.
This follows Friday’s signing of an ‘Asset Recycling Agreement’, under which the Commonwealth agreed to pay states an amount equal to 15 per cent of any sale proceeds which are allocated to infrastructure.
Commenting on the overall result, Ai Group chief executive Innes Willox said the government needed to foster an environment which was conducive to investment and productivity whilst taking a measured approach toward cutting the deficit over the medium term.
"The survey highlights two key messages from business ahead of next week's Budget,” Willox said. “Firstly, the Government needs to put a strong emphasis on creating the right environment for businesses to lift investment and improve productivity.”
“And secondly, while business is clearly backing the need to consolidate the budgetary position, the clear preference is for this to be done in a measured way over a number of years rather than risking damage to the still-fragile economy by cutting too fast or too hard or by saddling business with counterproductive tax increases.”
Willox added that a challenge confronting the government was to avoid being ‘one-dimensional’ in its thinking toward the budget, and that ‘far-sighted’ action was needed to restore public finances whilst growth still needed to be supported as a larger economy which would generate the tax revenue necessary to support growth.
He said the time is now right for increased infrastructure investment as capacity and skills previously used on mining related building projects are being freed up.