BUDGET 08-09: Business community welcomes spending brake

The business community has welcomed the government’s efforts to limit spending growth through more effective targeting of policies and programs.

The Rudd Government has budgeted for a surplus of $21.7 billion in 2008 09, 1.8 per cent of GDP, the largest budget surplus as a share of GDP in nearly a decade.

“The government has put the brakes on real spending and delivered a significant surplus which will be reinvested in future growth,” Business Council of Australia president Greig Gailey said. 

“Real spending is set to grow at half the rate we have seen in recent years, and this has been achieved without sacrificing spending in key areas such as education and infrastructure.

“This will take pressure off the economy and increase the capacity of businesses to grow over the longer term,"

Mr Gailey did warn however that downward pressure on inflation and repositioning fiscal policy towards investments in future growth rather than measures that encourage consumption must continue beyond this budget.

“While positive steps have been taken, ongoing attention needs to be paid to the quality of government spending and to improved fiscal processes and accountability, including better coordinating and planning across state and federal governments.

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