Release Date: 4/11/2013
PEAK employer body, the Tasmanian Chamber of Commerce and Industry says Tasmania’s government business enterprises (GBEs) must encourage economic growth in the State and not been viewed simply as revenue generators for the Government.
This was a central theme of the TCCI’s pre-budget submission to the Government presented last week. The TCCI also urged the Government to adopt a contemporary business approach to departmental and GBE operations.
Chief Executive Michael Bailey said the State Government needed to restructure as business had done over the past few years, to conform to the prevailing economic environment.
“While the Government has attempted to reduce spending it still has a burgeoning work force of public servants with an annual wages bill of more than $2 billion,” Mr Bailey said.
“However, tax revenue continues to decrease and this is not just confined to GST payments, but its own State tax collections are also falling.
“The usual solution to this dilemma adopted by Government and Treasury is to increase taxes across the board, or encourage its government, or semi -government businesses to dramatically increase charges, effectively strangling the main revenue contributors: business.
“With a difficult economic environment and unemployment hovering around 8.5 per cent, the budget should be the tool to encourage business growth, not inhibit it.”
Mr Bailey said the Government must determine the role it wants its GBEs to play.
“Are they seen simply as revenue cash cows to build the Treasury coffers, or would the economy and employment benefit more if they operated as economic and wealth generators for the wider economy?
“Recent instances of TT-Line’s and Hydro Tasmania’s large cash profits are examples where earnings could be better channelled into more competitive pricing and aggressive marketing to grow business and better benefit the wider Tasmanian economy.
“While both GBEs, like any business, have to provision for capital replacement and refurbishing, successive Governments’ demand for revenue has inhibited their capacity to generate broad economic growth for the State by TT-Line lowering fares to bring in more tourists and Hydro Tasmania offering lower price incentives to attract and grow business.
“In fact, the money pulled out of Hydro Tasmania over the years is one of the reasons Tasmanians are now paying significantly more for their electricity to provide for future generator and dam refurbishment and replacement.”
The TCCI says the State Government must cut its cloth and manage its expenditure in line with reduced revenue expectations. The TCCI urged the Government to change its policies to reflect the changing business environment in Tasmania and recognise the need to encourage business to create jobs and ultimately improve Government revenue.
“As a priority, it must cut the $610 million annual red tape compliance costs on Tasmanian business,” Mr Bailey said.
“The government-funded KPMG report released in January 2013, shows that the administrative cost to Tasmanian businesses to comply with regulation, was approximately $610 million and reducing this cost could be easily addressed by the Government.
“Tasmania is now at a critical stage where the Government must step aside and allow private enterprise a free rein to create wealth for the State.
“Tasmanian business will respond to a competitive environment but it’s the role of Government to show leadership and courage, to pull the levers and create a climate that is conducive for business to grow.
“That is the essence of the message we have conveyed to the State Government and we look forward to a positive response in the forthcoming budget,” Mr Bailey said.
Ends….