Treasurer Wayne Swan may have couched last night's budget in a "no frills - let's play it safe" style, but the reality has been anything but that for firms and their resource and mining clients, says Chang, Pistilli & Simmons partner Jason Mendens.

"The Resources Super Profits Tax (RSPT) is apparently underpinning a large proportion of the budget turnaround in the coming years," said Mendens. "We are seeing first hand the impact in the marketplace of the RSPT with a number of otherwise commercially viable projects and M&A deals being shelved or further stress-tested against ever more demanding risk/return criteria."  However, Mendens noted that his firm's clients in the healthcare sector seem to have fared somewhat better on the back of an announced increased spending on healthcare. 

Mills Oakley CEO John Nerurker observed that the "constant tweaking" to tax and superannuation rules were a challenge to many of his firm's clients.  "However, except for the resources sector, the large reforms foreshadowed before the Henry Review have not materialised yet," he said. "The government's announcement relating to the earnout arrangements on a look-through basis should promote fairer and simpler tax outcomes for clients involved in M&A transactions. The cut in the corporate tax rate will also be welcome for many clients.  However, many law firms and other businesses use a partnership model, so the company rate is not as relevant for them."

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