While this was clearly a budget for the almost mythological 'working families' - the impact on where they work hasn't had the same level of attention - despite some fairly significant changes for corporations. Our sympathy goes out to the accounting profession.

The Government has fiddled with a number of taxation arrangements and a large number of the headline 'savings' have come from modifications or tightening of tax rules. There are some positives - withholding tax applied to income distributed by Australian managed investment trusts to foreign residents will gradually be reduced from its current level of 30% to 7.5% over the course of the next four years - to encourage greater inward investment.

However, the business community is also starting to look into the detail - the scrip for scrip capital gains tax rollover provisions are being modified to stop fortunate tax arrangements emerging from M&A activities and employee share ownership schemes have also been modified so that discounts on shares over $1,000 are assessed as income up front. Another headache for the accountants is the period over which capital expenditure on 'in-house' software will depreciate moves from 2.5 years out to 4 years.

Fringe benefit tax exemptions will be tightened so that it applies to items (PDAs, Laptops and tools) that are primarily used for work purposes and meal cards under a salary sacrifice will lose their FBT exemption. And finally, the ATO has also received an extra $256.9 million for enhanced compliance, mainly focused on big business and high income earners.

The Government should be happy with the generally good responses from the business sector. In line with their consistent support in the lead up to the Budget, Australian Industry Group Chief Executive Heather Ridout maintained her positive stance characterising the Budget as taking a “hard-nosed approach” to cutting spending and welcomed many other measures such as skills and education initiatives and the Building Australia Fund.

Likewise the Australian Chamber of Commerce and Industry seem to be on board although with some reservations around whether enough has been done to counter inflation. Chief Executive Peter Anderson flagged concerns about anticipated increases in unemployment and need for action on structural tax reform.

A ‘no real surprises’ reaction from most economists to this year’s Budget. Generally, they aren’t expecting this Budget to aggravate inflation but are unsure as to whether it will have the desired effect of halting the growing rate of inflation.

Stephen Walters from JPMorgan believes the Budget delivered for members of Labor’s support base of the oft mentioned ‘working families’, while TD Securities senior strategist Joshua Williamson pegged the Budget as “generally favourable” for the market. Some of the measures announced in the Budget have led the market to expect weaker economic activity ahead, which saw a resultant drop in the value of the Australian dollar this morning.

RBC Capital Markets senior economist Su-Lin Ong (and former economic adviser to Paul Keating) wasn’t surprised by the surplus numbers but she, alongside many other economists, was impressed by the investment in the three new funds covering infrastructure, education and health, applauding the investment in capacity building for the nation.

The Reserve Bank made a welcome early New Year’s resolution today. The traditional, some might say anachronistic, organisation made a leap with the times and announced the traditional 24 hour delay in making the results of their monthly meetings public will soon be a thing of the past.

From February the Bank has promised to deliver brief explanations of their decisions and whether there will be any change to the cash rate as soon as the meeting concludes. A step that no doubt will be well received by the community who have previously been left hanging as economists speculate for days until the data is made available. Any change to the cash rate will take effect the following day.

In the online age when information is expected to be a click away such steps towards improved responsiveness and transparency, clear communication and accessibility is to be commended. It is simply not acceptable for any organisation, particularly one as important as the RBA, to hide behind unnecessary delays and restrictions on important information the public have a right to know.

“John, as you know I am a meat man… I’m looking forward to some Australian beef…”
- US President George W Bush

It’s here! The much anticipated APEC wagon has rolled, or more accurately sped at a pre-ordained constant 80kph traffic light-free motorcade into Sydney.

Returning to its birthplace, Australia, it’s a coming of age for the economic cooperation that was formed in 1989 with twelve members and a pure trade focus.

Much has been made about whether any major outcomes will result from APEC with detractors saying its nothing but a talkfest. But reality and the early signs are promising with Australia and the US signing major defence, visa, trade and IP treaties today and the mood optimistic APEC will deliver some major regional trade progress.

APEC and separate bilateral talks scheduled this week look likely to throw a lifeline to the sinking Doha Round.

The buzz today is of course the visit by President Bush and the discussions being held with his long time ally, friend and ‘man of steel’ John Howard. Both are under siege on their respective home fronts, so we can assume the two must be keen to find solace in their mutual concerns: Iraq, Afghanistan and climate change. Bush has all but thwarted any hopes Howard had on an APEC climate change direction by calling his own summit on the issue to be held later this year in Washington but it will still be a major agenda item for this Friday.

Last week John Howard was forced to concede that people hoping for tangible targets on emissions and binding agreements on climate change will be disappointed. But that doesn’t mean APEC is tokenistic. World leaders have scheduled bilateral meetings with anyone who’s anyone during the summit. Howard has a diary full of talks. Bush has scheduled bilateral talks with Chinese leader Hu Jintao, Indonesia’s Susilo Bambang Yudhoyono and potentially important talks with Russia’s Vladimir Putin. Add this to talks with Japan’s Prime Minister Shinzo Abe and the South Korans and it is clear that APEC is serving to bring sides together. There is hope too that the summit will help reengage leaders involved in the seemingly dismal Doha round of the WTO libralisation talks. This outcome alone would warrant the security price tag attached to hosting the talks.

For APEC detractors, global coverage of Australia has already been immense in the US, Canada, Asia and Russia.