CCIQ proposes radical solution to determining government costs

Thursday 1 July, 2010

Thursday 1 July 2010 marks an extraordinarily dark day for the Queensland business community with multiple cost increases being thrust upon them.

Chamber of Commerce and Industry Queensland (CCIQ) President, David Goodwin, outlined that from Thursday businesses will face major changes to the way they operate.

"Queensland employers are facing up to at least eight major cost challenges with massive increases simultaneously taking place across multiple aspects of business," Mr Goodwin said.

On top of an already costly operating environment the lot of a business has been made significantly more difficult with:

  • a $26 wage increase (4.8 per cent increase) associated with the Federal Minimum Wage review;
  • further wage, penalty and allowance increases associated with the phase in for new modern awards;
  • 13 per cent increase in workers compensation premiums;
  • 13.3 per cent increase in electricity prices;
  • at least 10.7 per cent increase in water prices; and
  • other significant increases in council rates, motor vehicle registration fees and road tolls.

These compare to a Treasury forecasted CPI increase for Queensland of just 3 per cent for 2010-11.

"Some of these increases are determined by Federal Government instruments whilst others are determined by the State Government.

"Each of these increases is assessed in isolation of each other under separate processes yet when we see them all on the same page we are left with the inescapable conclusion that jobs will have to be shed for businesses to remain viable.

"In some fortunate situations businesses will be in a position to pass on part of these cost increases to the consumer or be in a position to absorb part of it.  However in the main business viability will be significantly eroded and in many cases the cost increases will lead to job shedding.

"CCIQ believes this is totally unacceptable and we are today proposing that stricter parameters need to be set up across all of Government limiting combined cost increases to business to less than forecasted CPI for the forthcoming year.

"Under this approach some increases will be higher than CPI, some will have to be lower, but on average they can collectively not exceed CPI. This approach will require two independent umpires, one State and one Federal to have the final say on any increase.

"If not for Government imposed cost increases the private sector would have held prices constant on almost every front in recent years due to fierce competition.  It in turn highlights Government's monopolistic position and embedded inefficiencies.

"Unless we do something creative we are making our businesses increasingly uncompetitive in an increasingly globalised economy.  Business investment can easily be shifted with jobs varying accordingly.

"Whilst business owners need to ensure they are fully aware of these changes our overall system of determining costs under Government needs to radically change.

"A whole of Government solution is the only approach that can ensure that the above situation of across the board cost increases to business can never occur again,"  Mr Goodwin concluded.