Budget 2014: $10 billion cut to industry assistance, ASIC corporate registry to be privatised

Businesses receiving assistance from the federal government are the latest addition to Treasurer Joe Hockey’s budget hit-list, with reports over the weekend the government will seek to cut $10 billion in industry assistance in tomorrow’s budget.

After suggesting the government would be less willing to help flailing industries in a speech in April, Hockey told News Corp Australian businesses will need to share some of the budget burden.

“Those who depend heavily on government support will not necessarily receive the same support into the future,” Hockey said.

“Business has a responsibility to manage itself in the same way we expect (others to do so), other than those most vulnerable in the community.”

News Corp reports the cuts will come in the form of a “cost-recovery” plan, which will involve government agencies being scaled back and fees being applied to more services for businesses.

According to News Corp, the government currently provides spends $10.5 billion a year in industry assistance, with direct budget measures accounting for more than $5 billion, tax concessions claimed by businesses accounting for $4 billion and tariff protection accounting around $1 billion.

SmartCompany asked Treasury for further details about the programs to be altered but did not receive a response before deadline.

It’s likely the savings will be connected to the government’s plans to abolish, merge or sell a wide range of government agencies, which have been reported to affect between 50 and 70 agencies.

On the chopping board is the Australian Securities and Investments Commission corporate register, which the government will seek to privatise.

As previously reported by SmartCompany, the register is estimated to generate more than $625 million in revenue and has annual costs of around $140 million.

ASIC chairman Greg Medcraft told the economics references committee in February the corporate register was “frankly, a technology business” and there could be “huge benefits” in separating the registry business and “merging it with other government registries to leverage the economies of scale from [its] Siebel management system”.

In other budget measures confirmed over the weekend, Hockey said the revenue from the proposed increase in the fuel excise would contribute to a $82 billion roads package, which will be funded by the Commonwealth, state governments and the private sector.

“It we are going to make any changes top fuel excise, it will go into roads and we are laying out a plan for the biggest increase in road expenditure in Australian history,” Hockey said in an interview with Channel Nine.

However, at least some of the federal government’s $40 billion contribution to the roads package will come from re-announcing projects earmarked by the previous Labor government, and opposition infrastructure spokesperson Anthony Albanese has raised concerns the spending will come at the expense of investment in public transport.

Meanwhile, in a bid to show that even members of the government are prepared to personally contribute to the budget’s bottom line, Prime Minister Tony Abbott has announced the budget will include a 12-month pay freeze for members of parliament and senior public servants.

According to Fairfax, a pay freeze could cost Abbott, who earns an annual salary of more than $500,000, an estimated $10,000 a year.