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Critics hammered on Australia's proposed budget

Critics and business leaders have expressed disappointment with the proposed federal budget of Australia unveiled last night for fiscal year 2011-2012.

Disappointed reactions came from both industry and small business sectors directly involved in providing a push to Australia's domestic production targeted to grow by 4 percent.

The Australian government led by Prime Minister Julia Gillard presented A$342.4 billion in spending for next fiscal year beginning in June 2011. Nevertheless, opposition lawmakers said further cuts can still be done to lower inflation risks to the economy.

The projected government spending, according to Treasurer Wayne Swan the deficit of A$49.4 billion can be turned into a surplus of A$3.5 billion as record high commodity prices will raise the country's trade export earnings.

Opposition leader Tony Abbott said in an interview over Australian Broadcasting radio: "If a surplus is ever achieved, it will be a surplus made in China not in Australia."

Independent Senator Nick Xenophon, on the other hand, said it is a bit dangerous to rely too much on the trade surplus and the mining boom and be internally weak.

The Gillard administration said the economy will be more open to skilled migration and more infrastructure development.

The Australian Industry Group has agreed the skills and infrastructure measures are worthwhile, adding to the productivity capacity of the economy in the medium-term. However, the industry of small businesses said there was not much said about new guidelines that could reduce the "red tape" that now persists within the sector.

"While there was a welcome focus on fundamentals, more could have been done to offset the risks to the economy due to the impact of the strong dollar on sectors such as manufacturing, tourism and education, which are on the wrong side of the resource boom," AIG said in an emailed statement.

"While the economy is forecast to grow strongly at the aggregate level, this is masking widespread weakness and uncertainty across major sectors and giving rise to a lopsided economy," it said.

"It is disappointing, despite the frequent acknowledgement of the problem, that little has been done by way of programs to address the lopsided nature of the economy by investing in innovation, business capability development and exporters."

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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