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Industry wants both tax cuts and increased spending

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Industry wants the government to cut company tax, increase infrastructure spending and also balance the budget within the next five years, according to a survey.

A survey of 364 businesses by the Australian Industry Group (Ai Group) has found that the top priority for the budget should be reducing the tax burden on businesses. 70 per cent of respondents placed this on the top of their wish list.

The second top priority of respondents was increased infrastructure spending (68 per cent), while achieving a balanced budget within the next five years was nominated as a priority by 57 per cent of respondents.

These leading preferences were followed by increasing spending on training and apprentices (39 per cent), raising tax incentives for industry research and development (39 per cent) and bringing the Budget into balance within two years (28 per cent).

Commenting on the survey, Ai Group Chief Executive, Innes Willox, said, "The survey highlights two key messages from business ahead of next week's Budget. 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.”

The survey coincides with a separate report by by The Grattan Institute which finds states and territories have spent more on infrastructure in the past five years than any other time on record and it is causing them budget problems.

The reports says that the states and territories, collectively, have borrowed extensively to invest in infrastructure. As a result, their finances have moved from $37 billion in the black in 2006 to $69 billion in the red last year.

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