State Budget remedy needed for sick Queensland business economy
Chamber of Commerce & Industry Queensland (CCIQ) today called on the government to provide the remedy for an unhealthy Queensland business community after the latest figures released by the Australian Bureau of Statics revealed business investment has now been in decline for five consecutive quarters.
CCIQ President David Goodwin said the extent of the downturn is as bad as the 'recession we had to have' in the early nineties and its possible things could get worse unless the State Government Budget contains a strong antidote.
"CCIQ is alarmed at this trend of decline as business investment is the driver of future economic growth," Mr Goodwin said.
"We are effectively setting ourselves up for a period of economic stagnation unless we can turn this around.
"Queensland's private sector is at present, failing to position itself for the future, but who can blame them? Businesses are witnessing a period of sustained pressure on their profitability as business costs continue to spiral and sales are suppressed as Queensland consumers are equally unsure of what the future holds."
National accounts data confirms that Queensland is lagging the national economic recovery and that our state has had the lowest growth in the March Quarter 2010 and the Year to the March Quarter 2010.
Mr Goodwin said there will be one of two outcomes in the State Budget on Tuesday.
"Either the State's financial position will not be as bad as first anticipated, or our expectations of poor year will be realised," Mr Goodwin said.
"If the budget position is better than anticipated and there is money available, then this must be quarantined as a tonic for business.
"If the budget is indeed in a bleak position then the State Government must urgently take remedial action to address its underlying structural and embedded problems.
"The State Government has placed much emphasis on its reduced revenue stream yet no action has been taken on reducing its expenditure. This is a trend contrary to sound business practices. It is holding our state back and has to stop."
CCIQ is calling on the State Government to continue on its path of responsible economic management but strengthen its pro-business policies.
"To improve the health of our business community, the State Government must:
- be more aggressive in working towards achieving a budget operating surplus through stronger efforts to reduce general government operating expenses;
- continue with increased public infrastructure spending with emphasis given to encouraging private sector involvement; and
- commit to new business assistance that will improve Queensland's business tax competitiveness," Mr Goodwin said.
"If the business community has stopped investing then it has lost confidence in its future. Queensland businesses need a cure and the State Budget is just the shot in the arm to do the job."