Statement by Robert Wallace - Chief Executive Officer

The State’s peak employer body, the Tasmanian Chamber of Commerce and Industry (TCCI),has welcomed the 2010-11 State Budget as a responsible strategy that will work towards restoring business confidence. But the TCCI is disappointed the Budget did not address the demographic challenge confronting Tasmania.

TCCI Chief Executive Officer Robert Wallace said the Budget provided a clear and credible path to return to surplus by 2012-13 and for Tasmania to remain net debt free.

“This Budget will assist in restoring business confidence in Tasmania so that the economic recovery is sustainable. Our economy is expected to grow by 2.25 percent in 2010-11 compared with 3.25 percent growth nationally.

“Being the only state in surplus and net debt free in 2012-13 will be an important signal for investor confidence and importantly, should maintain Tasmania’s credit rating.

“The business community welcomes the Government’s commitment not to increases taxes including backdoor taxes such as raising fees and charges. We also welcome the promised land tax reform that TCCI has campaigned in favour of for some time.”

Mr Wallace said the TCCI was concerned about the rising wage costs for State employees that are set to increase from 48.3 percent of the Budget to 51.8 percent in 2013-14, an increase of $249 million.

“We are concerned that public sector wage bill is increasing across the forward estimates and is putting our net debt-free status at risk.

“We need to have strong surplus budgets and public sector productivity gains if the fiscal strategy and unfunded superannuation target is to be achieved,” Mr Wallace said.

But the TCCI congratulated the Government for continuing the policy of using payroll tax rebates as a stimulus for employment.

“The TCCI’s representations that delivered the payroll tax rebate have been successful in creating 360 new jobs in the past year. We are calling for this commitment to extend past 2011 with a more permanent reform of payroll tax.

“This initiative will provide a strong incentive to employ new staff in an economy where we have the highest unemployment rate in the nation.”

Mr Wallace said the TCCI was pleased to see a review of State taxation to ensure Tasmania had the most competitive taxation system in the country to drive business investment and confidence

“We are pleased to see the Treasurer commit to a review of the State taxation system to ensure it is competitive and delivers increased services to the Tasmanian community.
“Improving the skills of Tasmanians is important in increasing the productivity of our State.

The announcement of $11 million for adult literacy and $5.85 million for raising the awareness of opportunities presented by the digital economy is also welcomed.

“The funding commitment to increase the literacy of the Tasmanian workforce and awareness of digital economy opportunities will help to lift State productivity,” Mr Wallace said.

“But we are disappointed that the Budget failed to address Tasmania’s demographic challenge. During the lead up to this Budget, the TCCI called for the establishment of the Demographic Change Policy Council to manage the strategies and implementation of policy to overcome the issues with the aging Tasmanian population.
“It is a concern that we are not seeing any commitment to address the long-term challenge of demographic change through the establishment of such a Policy Council,” Mr Wallace said.

The TCCI says the State infrastructure spending is significant but business is concerned that the investment in getting Tasmania’s rail system back on track is not sufficient with just $244 million allocated over the forward estimates.

“The large infrastructure spend is due to Federal money in health and education, but we would like to see more investment in the State rail system to bring it back to a sustainable business. However, we welcome the establishment of the new planning fund to identify priority areas of road investment.

“The Budget sees funding for the establishment on a State Asbestos Unit to deal with the removal of asbestos from Tasmanian businesses. The TCCI welcomes the move but would urge the Government to invite industry to be part of establishing the unit. We welcome the Asbestos Unit initiative but would like to see more industry involvement in setting up the unit and developing the legislation,” Mr Wallace said.

“The TCCI is pleased to see the TCCI Growing Business Pilot Project funded so we can start to help businesses throughout the State to benchmark their performances and gain a diagnostic picture of their operations to enhance their viability and ensure we secure jobs for Tasmanian families,” Mr Wallace said.