The State’s strong financial results outlined in today’s Pre-Election Budget Update are welcome, says VECCI.
“From the business point of view, we believe that the Government should make long-term decisions regarding the surplus with a mind to the state of the economy and Victoria’s competitive position”, says VECCI Chief Executive Officer Mr Neil Coulson.
“While the Victorian economy is still growing, a number of factors are taking their toll on our industries and the wider economy.
“Traditional areas of industry and export strength such as food processing and automotive products are being heavily affected by factors such as historically high fuel prices, drought, a higher Australian dollar and a worldwide wine glut.
“Skilled and unskilled workers are in shortly supply, a situation further exacerbated by the mining boom which is disproportionately benefiting the outlying States.
“Combined with the natural tendency of tourists and investors to drift towards sunbelt States, we have a situation where Victoria has to pedal faster to keep up.
“While State Governments may have little control over international factors affecting economic performance, their actions can have an impact on building competitiveness at home.
“While Victoria is largely ahead of the curve in terms of its performance in the area of State taxation, more can be done.
“Payroll tax is effectively a penalty on those who employ Victorians, currently representing an impost on employers of around $1,800 per job.
“While VECCI acknowledges the staged payroll tax cuts announced in the May 2007 State Budget, we would challenge all parties competing in this Election to commit to Victoria becoming the lowest taxer of employment of all the States. Queensland’s payroll tax rate is 4.75 percent, while Victoria’s payroll tax rate is 5.15 percent.
“A good first step with regard to payroll tax would be to bring forward the cuts planned for 1 July 2007 to apply from 1 January 2007.
“Combined with carefully targeted drought relief in regional areas, payroll tax relief would provide some tangible benefit to those employers hit by higher fuel prices, interest rates and the drought.
“Infrastructure is also a key consideration for employers. The next State Government needs to commit to a significant funding contribution to support channel deepening works in Port Phillip Bay.
“The recent flurry of publicity on climate change brought on by the publication of the Stern Report brings into focus the issue of climate change and greenhouse gas abatement. While the joint Commonwealth/State funding initiatives announced last month were excellent, focussing as they did on a new solar plant near Mildura and cleaner coal technology at Hazelwood, there needs to be a continued emphasis on the Government funding of technology-based solutions to the greenhouse problem, such as significant further funding for cleaner coal technologies.
“The implementation of reforms in these interrelated areas will help set the foundation for sustainable investment and job creation and ensure that we do not fall behind our interstate and overseas competitors”, says Mr Coulson. |
