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Federal Budget 2008-An uncertain budget in uncertain times
By Ernst & Young
May 13, 2008

Federal Budget 2008

An uncertain budget in uncertain times


In an unpredictable economic climate, this year's budget redirects government policy to invest in infrastructure for future generations. However, its full impact will be unclear for some years to come, with a major tax system overhaul promised and uncertainty around where and when spending will occur. For example, the $40b spend from three new infrastructure funds is yet to be allocated.

While we welcome the government's tax review, we strongly urge business to engage throughout the process to ensure the right outcome. Government needs to consult business on the staging of the review to enable business to prepare for involvement in this important reform.

Spending on skills is also welcome, but much more needs to be done to improve productivity and increase supply in the constrained labour market.

Employers and employees can breathe a sigh of relief that the government's stock option changes focus on preventing backdated documents and inappropriate behaviour, but do not change the core tax rules for governing stock option schemes. However, employers need to urgently review salary packaging policies in light of immediate budget changes to FBT.

Find out more as Ernst & Young's 2008 Federal Budget Brief (pdf, 472kb) analyses the key components of the 2008 Federal Budget and the impact of Budget measures for business.

For further information on the 2008 Federal Budget, visit:

The Commonwealth Government's Federal Budget website
http://www.budget.gov.au/

The Treasurer's website
http://www.treasurer.gov.au/

The Assistant Treasurer's website
assistant.treasurer.gov.au

The Finance Minister's website
http://www.financeminister.gov.au/