By ROBERT WALLACE

TASMANIA’S State Budget for 2010/11 delivered on  June 17 by Treasurer Michael Aird, represents the beginning of the quest to bring our public finances back into surplus and to establish a fairer and more effective taxation regime.

Robert Wallace, TCCI chief executive officer

The Budget for the coming 12 months does not represent the completion of the Government’s task and much work still remains to be done if Tasmania is to continue its economic recovery and provide the opportunities and services for Tasmania now and into the future.

While the TCCI has welcomed the Budget as a responsible fiscal plan that will work towards restoring business confidence, there are of course a number of areas where business would like to see greater focus.

Prime among these is reform of Tasmania’s payroll tax regime and we are looking for a firm commitment to continue the payroll tax rebate scheme beyond 2011 and the eventual removal of the anti-jobs impost. The TCCI’s representations that delivered this rebate at the height of the Global Financial Crisis have been successful in creating 360 new jobs in the past year.  A continuation of this benefit and a more permanent reform leading to a discontinuation of payroll tax will provide a strong incentive to employ more people in an economy where we have the highest unemployment rate in the nation.

Increased funding for skills training is also vital. The lack of availability of skilled staff is a constant finding of the TCCI’s Tasmanian Survey of Business Expectations and this inhibits employment, business growth and Tasmania’s economic recovery. We need to upskill our people to take on new jobs in new businesses and industries.

It is critical that the Government addresses this through the coming year and increasingly, in subsequent Budgets.

With the public sector wages bill now set to comprise more than 50 percent of the total State Budget, business is looking to see significant productivity gains within the public sector. This spending on public servant wages is the highest of all the Australian states and severely inhibits the Government’s ability to spend on vital infrastructure projects such as roadworks, port facilities, railways, schools, hospitals. Increased productivity is not just a challenge for business and industry, The State Government must set out a path to gain sustainable improvements in the public sector, particularly through working smarter and using new hardware and software technology.

The Treasurer’s announcement of a comprehensive and consultative review of the Tasmanian taxation system to improve its competitiveness and sustainability is a welcome initiative. The TCCI looks forward to participating the proposed all-party review.

We will use the opportunity to push for reform and removal of the iniquitous payroll tax and are keen to see an examination of more innovative taxation models as opposed to tinkering around the edges.

Above all, we want to see a system that is fair, efficient and sustainable, one that supports the provision of essential public services and which allows Tasmanian business to grow and prosper.