Business-friendly Budget needed to boost economy in difficulty
The Chamber of Commerce and Industry Queensland (CCIQ) says the upcoming State Budget is one of the most important in recent history because of the state of the economy.
CCIQ Director of Advocacy Nick Behrens called on Treasurer Curtis Pitt to deliver a Budget which must double down on efforts to help the Queensland economy transition from the resources boom to a more diversified economy.
Mr Behrens said the June 14 Budget comes at a time when the latest Australian Bureau of Statistics national account data (released yesterday) revealed Queensland’s domestic economy continued to experience widespread difficulty.
“Over the year to the March quarter, domestic economic activity in trend terms contracted by 1.5 per cent due to a collapse of business investment and contrasts to national growth of 0.8 per cent,” he said.
“At the same time the trend unemployment rate for Queensland is again on the rise, increasing to 6.2 per cent in April 2016 and compares to a national unemployment rate of 5.7 per cent.”
Mr Behrens said CCIQ regarded the State Budget as the Queensland Government’s foremost instrument of economic and fiscal management and it had to “arrest these concerning trends”.
“There are a number of existing government policies under the Jobs Now, Jobs for Future package that benefit small business.
“However, despite our support for the Advance Queensland initiative, the $180 million program is not enough on its own to transition the $305 billion Queensland economy post the resources boom.
“It is but a drop in the ocean and substantially more is needed.
“The 2016-17 State Budget must further stimulate economic activity and jobs, prioritise spending on infrastructure, work to restore the state’s financial position and commit to tax change.”
Mr Behrens said Premier Annastacia Palaszczuk had promised CCIQ a small business-friendly Budget and “we expect this to be delivered”.
“CCIQ wants to see the government lift the payroll tax exemption threshold to $1.2 million, at least another $5 billion infrastructure spend each year and meaningful red tape reduction measures.
“We are concerned at the decreasing proportion of the Budget that is being allocated to infrastructure. In short, the Treasurer must invest heavily in infrastructure.”
Mr Behrens said that as a percentage of the Queensland economy, infrastructure spend had declined from a peak of 6 per cent in 2007-08 to just 2.6 per cent in 2015-16.
“This is anticipated to decrease to 2 per cent across the forward estimates of the State Budget,” he said.
“CCIQ is recommending that the government commit to a minimum infrastructure spend of 4.25 per cent of GSP.
“On this basis, we should be spending $12.9 billion in 2016-17 – not just $8.8 billion, as currently committed to by the government.
“The government must work constructively with the business community and deliver a Budget that fundamentally addresses a domestic economy doing it tough at present.”
Key recommendations from CCIQ include:
The Queensland Government must continue to deliver responsible fiscal management through:
• Reducing public sector debt;
• Ensuring government spending does not exceed 2.5 per cent growth per annum on average across the forward estimates; and
• Capping the Queensland Public Service (FTE) at 4.1 per cent of our State’s population.
• Progressively lift the payroll tax exemption threshold from $1.1 million to $1.6 million; and
• Adjust duty rates to ensure that taxation receipts remain neutral to increasing insurance premiums and 2013-14 changes be reformed.
• Progressively lift infrastructure spend to 4.25 per cent of the GSP.
• Reduce the regulatory shackles by removing unnecessary and duplicative areas of compliance, stem the flow of new regulation and make it easier for business to comply.
• Advance Queensland innovation programs need to be reorientated to capture interest from existing small business not just start-ups; and
• Innovation programs need to support incremental innovations in already established small business in their changes to production, service and process.
CCIQ’s State Budget Submission was forwarded to the Treasurer in January 2016 and can be found here: https://www.cciq.com.au/assets/Advocacy/Submissions/201617-Budget-Submission-screen.pdf