VECCI will today hold an invitation-only Pre-Election Forum on the Victorian Economy at its head office in Albert Street, East Melbourne.
The speakers at the Forum will include: the Hon John Brumby MP, Treasurer of Victoria, and Robert Clark, Shadow Treasurer.
“From a business point of view, we believe that the next Government needs to have a long-term focus with regard to the kind of long-term business issues we examined at our 2005 Victoria Summit such as business costs, skills and innovation, export potential, intergovernmental co-operation, energy supply and infrastructure”, 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 relatively high 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.
“For example, Victoria is largely ahead of the curve in terms of its performance in the area of State taxation, but more can be done.
“Payroll tax, for example, has increased as a proportion of revenue, now accounting for 31 percent of total taxation revenue, compared to 24.6 percent in 1999/00.
“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 2006 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.
“The funding of infrastructure is also a key consideration for employers. Our trade competitors are not standing still in this respect – for example, channel deepening projects have been undertaken in Adelaide, Auckland and Portland on the West Coast of the United States. The next State Government needs to commit to a significant funding contribution to support channel deepening works in Port Phillip Bay.
“Climate change and greenhouse gas abatement is also a consideration for State Governments framing Budgets. While the recent joint Commonwealth/State funding initiatives were excellent, focusing 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.
“Similar challenges exist with water, where the Government funding contribution to recycling initiatives and capacity building will need to be accelerated given the continuing drought.
“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.
“Key questions that need to be answered tonight include:
- The Election has so far been dominated by talk of carving up the economic cake - what policies are being put forward to grow the economic cake?
- With the environment becoming an issue of increasing public importance, will measures to combat environmental challenges, for example cleaner coal technologies and water recycling infrastructure, claim a greater share of future State Budgets over time?
- With manufacturing under pressure, what are the new industries that will underpin Victoria's future economic growth and budget revenue position?
- With pressures to provide better infrastructure in terms of increasingly well recognised environmental challenges and projected world trade growth, what model will you use to approach these issues, for example debt funding, Public-Private Partnerships, or a mixture of both?
- In light of the trend towards greater centralisation of Commonwealth powers, what is the future role of State Governments as economic agents and deliverers of services?
“With a State Election just under a week away, it is important that business and other key stakeholders are aware of the economic policies and related initiatives of each of the leading political parties”, says Mr Coulson.
The VECCI Pre-Election Forum on the Economy will be held on Tuesday 21 November 2006, between 5.30pm and 7.00pm at VECCI, Level 5, 486 Albert Street, East Melbourne – please call Chris James if you wish to report this event. |
