The strategy on skills contained in the recent Federal Budget is very positive and when combined with the health initiatives will bring widespread benefits, says Australian Industry Group (Ai Group) Chief Executive Heather Ridout.
However, Ms Ridout warns Australia still faces major productivity challenges and capacity constraints and more will need to be done to address these problems.
"We (Ai Group) are pleased with the measures on skills development and the extension of Kickstart – they are well directed and well targeted, says Ms Ridout. “They target skill shortfalls in critical areas, deal with the important issues of language, literacy and numeracy, and put in place important directional reforms. “Pleasingly they rely on building on close partnerships between industry and the VET system.
"The overall increase in skills places is important but much more will need to be done, especially given the rapidly expanding skills gap of some 240,000 workers per year.
"There is also an increase in the overall level of skilled migration of 5750 places which is an important component of helping respond to the skills shortages we will continue to face.”
Ms Ridout says there are a number of areas where the Budget falls short.
“It’s disappointing there are no new investments in business Research and Development and that the Government is persisting with the deeply flawed changes to the existing R&D tax credit, she says.
“It is also disappointing the Government has cut the Green Car Innovation Fund by $200 million – this is short-sighted and will hurt our car industry which has worked hard to remain competitive through the Global Financial Crisis.
"We welcome the continuation of the TradeStart program, however, we are disappointed there's no additional funding for the Export Market Development Grants scheme. This fails to provide extra help for our exporters who have been battling a consistently high dollar and will continue to do so for some time to come."
Overall Ms Ridout says the Budget is “fiscally strong” and avoids the temptation for “election year giveaways”, relying heavily on a recovery in revenues to get back to surplus.