Prime Minister Malcolm Turnbull has so far failed to live up to promise. Photo / Getty Images
Prime Minister Malcolm Turnbull has so far failed to live up to promise. Photo / Getty Images
Prime Minister appears more concerned with not ruffling voters than delivering on any hopes industry had.
It would be remiss of me as a chronicler of Australian business happenings not to appraise you of last week's Federal Budget, although there was so little in it many Australians have already forgotten it.
The centrepiece of Prime Minster Malcolm Turnbull and Treasurer Scott Morrison's first Budget was a plan to cut the company tax rate from 30 per cent to 25 per cent. The cuts will take place over a decade, with a progressively lower tax rate rolled out first to small businesses then to all businesses.
It's the sort of Budget policy Australians and Australian businesses have grown used to, where promised spending is planned so far into the future that it might never actually happen.
And how much good it will do is questionable. Certainly it won't do much to reduce the overall amount of tax Australians are paying. Here, if a company has paid tax on its profits, the tax owners or shareholders pay when they receive those profits by way of dividends is reduced by a corresponding amount.
So the real effect of the company tax cut is that companies will pay less but their owners - in many case Mum and Dad shareholders - will pay more.
There was also a well-telegraphed crackdown on global tax avoidance and a winding back of some of the generous superannuation concessions many middle and high income Australians have enjoyed.
Coming from a Prime Minister who so raised the hopes of Australian business when he came to office last year, there was very little in the budget to inspire the nation.
Turnbull promised a lot when he came into power eight months ago. Business leaders felt they had a leader who understood what was needed to help their enterprises thrive.
Some of that goodwill is starting to evaporate.
First there were the bungled attempts at structural tax reform. Turnbull flirted with the idea of raising GST but quickly retreated in the face of some public and political resistance. This was disappointing for businesses which felt Turnbull had the best chance of anyone in recent years to introduce a reform that could put the tax system on a more sustainable footing for the years to come.
The policy flip-flopping on tax reform left a feeling that the most eloquent and persuasive Prime Minister since Paul Keating had squandered his opportunity.
Then there was the Budget. For all of Turnbull's talk of innovation and invigorating business, there was very little in the Budget that is actually going to help make this happen. There was hardly anything to foster the culture of innovation which Turnbull has said is so crucial to Australia's future prosperity.
The Budget had more to do with not scaring voters ahead of the election, which Turnbull yesterday called for July 2.
Turnbull looks likely to win. Perhaps with his own election win under his belt he will be able to pursue more ambitious policies for business.
But from indications thus far, Australian business leaders shouldn't hold their breath.
Healthy demand for Australian vitamins
Blackmores Chief Executive Christine Holgate.
Unlike demand for iron ore and coal, China's demand for clean and healthy nutrition shows no sign of abating.
This has driven the success of Australian vitamins and supplements company Blackmores, one of ASX's top performing stocks in the last few years.
The company reported last week its profits for the first nine months of the current financial year were up 145 per cent to A$76 million ($82 million). Now Blackmores is planning to go one better by selling Chinese herbal medicine to the Chinese.
Last week it spent A$23 million buying herbal medicine maker Global Therapeutics, founded in 1999 in what was then Australia's hippy capital, Byron Bay.
Global Therapeutics currently markets its products in Australia, itself a rapidly growing market, with 4700 registered practitioners of traditional Chinese medicine. It is Australia's market leader in Chinese herbal medicine, with an estimated 80 per cent market share in health food stores.
But of course China is the big prize and this is what Blackmores chief executive Christine Holgate had in mind when she bought the company. She says Global Therapeutics will allow the company to better understand the needs of Chinese healthcare professionals and consumers.
Blackmores will run the company as a separate entity but use its capital to launch Global Therapeutics in China.
Blackmores' success has been reflected in the price of its shares, which hit a record of A$220.90, up from A$25 about a year and a half earlier. The shares are now at about A$171 on the back of recent concerns about changes to e-commerce regulations. But the changes don't appear to have caused a dip in sales so Blackmores looks set to continue its spectacular growth.
