Tomorrow’s State Budget represents a chance to provide affordable business cost relief to businesses and keep Victoria competitive with other States.
“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 operating just above recession levels”, says VECCI Chief Executive Officer Neil Coulson.
“However, there are downside economic and financial risks facing Victoria, including continuing drought conditions, a relatively high Australian dollar and the ever-present threat of inflationary pressures that could rekindle upward pressure on interest rates.
“Looking ahead, it is possible 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, particularly given the reliance of our export industries on water and brown coal.
“Specific measures sought in tomorrow’s Budget 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.
- A stronger focus on water infrastructure investment and measures to assist business cut water use.
- Meaningful engagement of the business sector in efforts to cut red tape.
- Significant Government investment in the Port Phillip Bay Channel Deepening Project.
- A strong continued focus on further building the tourism and events sector, given the long-term pressures on the manufacturing and agricultural sectors.
“A 20 percent cut in WorkCover premiums could be amply afforded by the Victorian WorkCover Authority (VWA). The results for the first half of the 2006/07 financial year show a net profit of $675 million and a $331 million performance from insurance operations, with a record funding ratio of 128 percent, up from 115 percent on the previous half-year.
“Other improvements include the lowest ever injury rate, an increase in satisfaction amongst injured workers and employers and a reduction in long-term claims by $139 million.
“The WorkCover Authority’s unadjusted funding ratio of 128% is at the upper end of actuarial expectations concerning prudential requirements. The ratio reflects an extremely healthy financial performance for the Authority. The ratio was around 84% in 2000.
“The $40 million CBD Congestion Levy could be abolished without seriously impacting the Budget bottom line, particularly when ongoing surpluses of nearly $400 million are expected over the medium term. This is especially so when there is no objective evidence that the levy has reduced traffic flows or congestion around the CBD nor any evidence that it has encouraged more people to use public transport. Congestion problems can be more effectively addressed by further enhancements to the frequency, reliability and scope of Melbourne’s public transport system.
“Given the positive findings of the Port Phillip Bay channel deepening Supplementary Environmental Effects Statement (SEES), it would be prudent to set aside some monies for capital works, given that the project is projected to commence next financial year – given the delays in the project, a Government budgetary allocation would also boost confidence among business stakeholders.
“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. |
