The forthcoming State Budget will have a role to play in positioning the Victorian business sector and the wider economy in uncertain times.
“Victoria is well-positioned economically and financially - on the one hand between the booming outlying States of Queensland and Western Australia - and, on the other hand, a struggling Tasmania, a narrowly-based South Australian economy and a New South Wales economy on the verge of recession”, says VECCI Chief Executive Officer Neil Coulson.
“However, there are downside economic and financial risks that threaten to undermine growth and therefore need to be carefully managed. These include possible public sector wage pressures, continuing drought conditions, a relatively high Australian dollar and possibly higher inflation around input cost pressures such oil and wages driven by labour shortages that could rekindle upward pressure on interest rates.
“Looking ahead, it is not inconceivable that policy responses from Governments to our current water, climate, energy and environmental challenges will impose – either directly or indirectly - more rather than less pressure on input prices, business operating costs and overall competitiveness.
“As we head through 2007 it is therefore important that the State Government recognise the critical role this year’s Budget has to play in driving improved productivity and new investment across the economy, as well as tackling some of the longer-term issues facing the State, including greenhouse and water pressures.
“We consider the focus of the 2007/08 Budget needs to rest squarely on:
- Lowering business operating costs in order to underpin improved competitiveness. This must include continuing the momentum of regulatory reform.
- Addressing gaps in the State’s infrastructure base, including important trade-facilitation and water capacity and recycling projects, reflecting the fact that Melbourne’s population will increase by 1 million people by 2030.
- Developing new incentives to promote the more efficient and productive use of resources.
- Boosting the private sector’s capacity to achieve further success in international markets.
- Elevating the competitive position of leading, strategically important industry sectors like tourism.
- Making best use of our human capital resources.
“Specific measures sought include:
- Aiming for a twenty percent reduction in WorkCover premiums to provide Victorian employers with Australia’s lowest compensation premiums.
- The abolition of the Congestion Levy to make Melbourne’s CBD a more competitive location for investment.
- Meaningful engagement of the business sector in efforts to cut red tape.
- Significant Government investment in the Port Phillip Bay Channel Deepening Project.
- Strong focus on water infrastructure investment with a special focus on boosting recycling and reducing water wastage in irrigated agriculture
- New incentives to encourage smarter water use by business
- Measures to boost trade for SME sector, including better pre-export intellectual property protection
- A stronger focus on the tourism sector, including support for more direct flights to Melbourne Airport
- Boosting the capacity of our human resources, beginning with the speedy implementation of recent training system reforms considered under the COAG Review of Training such as mutual recognition qualifications and competency based completions of Australian Apprenticeships.
“There is an opportunity for Victoria to press ahead the advantage of being the most competitive of Australia’s southern States and the most attractive place to live, work and invest”, says Mr Coulson. |
