The Rudd Labor government which has set Australia on the course for a record deficit - in part due to the major slowdown in mining and in project developments - has failed to deliver on a promise claimed by the Association of Mining & Exploration Companies (AMEC).
Australia which had a healthy surplus last year is now projected by Federal Treasurer Wayne Swan to transform into a deficit of around $A57.6bn ($US44bn), or about 5% of gross domestic product.
What has concerned many analysts commenting in the media today after Swan's budget delivery last night is that the level of recovery perceived by Canberra is based on China's growth getting out of first gear. One factor already evident from the market meltdown in Australia is that Chinese companies are now the major, almost sole, financiers for projects and in propping cash-strapped Australian companies.
AMEC's chief executive Simon Bennison said last night's budget missed an excellent opportunity to shore up investor confidence, secure jobs and stimulate economic activity in the regions.
The mining and exploration sector appreciates the government's contributions to infrastructure, particularly the NSW Hunter Expressway and ports in the Northern Territory and Western Australia, but we are deeply disappointed that the government chose to delay Flow Through Shares (FTS) yet again, Bennison said.
FTS will deliver both immediate and long-term benefits to every Australian, at a relatively low cost to government.
Allowing companies that are not yet in profit to pass on their unused tax credits to investors will provide a much needed boost to investor confidence.
A submission made to the Rudd Government by AMEC on the FTS had pointed out this investment mechanism at a time when capital raising for exploration - particularly by juniors - could have seen between 600 to 1 700 more people employed in 2009-10.
It said the taxation money foregone by Treasury would be far outweighed by the added money spent in the ground, capital difficult to obtain from conventional sources today. Then there is the impact of a major discovery.
While Bennison described this as a missed opportunity Federal governments in the past decade have either been deaf to this concept or have been swayed by Federal Treasury that doesn't like any mechanisms that impairs its tax gathering capabilities.
But at least past governments never made an electoral undertaking.