Event: BCA Chief Executive Bran Black interview with Laura Jayes, AM Agenda, Sky News
Speakers: AM Agenda, Host Laura Jayes; Business Council of Australia Chief Executive Bran Black
Date: 3 December 2024
Topics: Regulation Rumble report, gas

E&OE

Laura Jayes, AM Agenda Host: Well, South Australia has taken the crown for the second year running, in a new report that's revealed the state is the most supportive of businesses, followed by Tasmania and the ACT. Victoria ranked the worst. To discuss the result, I'm joined by the Business Council of Australia, Chief Executive Bran Black. Bran, thank you for your time. On what criteria did you put this ranking together?

Bran Black, Business Council Chief Executive: Hi Laura, thanks for having me. Look, we look at a couple of key things. Principally, we look at two core areas. We look at planning on the one hand, and we also look at cost and regulation on the other.

So, in the planning context, we look at four key measures. That's efficiency, consistency, certainty and transparency within planning systems. And then with the costs and regulation side of things, we look at taxes on property, so that's land tax and stamp duty. We look at payroll tax, we look at workers compensation schemes and retail trading and then we also look at business licencing. So that's really the number of licences that you need for particular types of businesses. So having a cafe, having a childcare centre, or having a small retail business.

Laura: Well, Victoria (being at the bottom of the list) has taken umbrage, as you would expect, and they pointed out that they've had 30 per cent increase in business investment in the last year or couple of years. Do you not give them credit for that?

Bran: Look, I think it's a good thing, of course, to have business investment. We do appreciate that a proportion of that comes off the back of population increases, and that also reflects a reasonably low base in terms of post-COVID growth.

But the reality is, with our report, what we look to is particular metrics that we know that businesses regard as important when it comes to their own decisions about where to invest. And we know that Victoria's got more work to do with respect to stamp duty, it's got the highest stamp duty rate in the country. Land Tax, it's got the third highest land tax rate in the country. It's got significant business licencing requirements, and its payroll tax rate is high, and it's also low threshold as well, just sitting at $900,000.

So, there's work to do. And our point with this report is that whether you're ranked first or last, there is always more work to do because we want to encourage states to be as competitive as possible.

Laura: But looking at these metrics, I mean, they are important metrics, as you point out, you're trying to encourage states to get rid of all this unnecessary red tape to make it easier for business to do business, what they do best. But I mean, when you're looking at this with a longer lens, isn't it better for businesses to invest in bigger global cities like Melbourne and Sydney?

Bran: Well, we are seeing that companies are making decisions to invest in particular jurisdictions having regard to where they can find the most attractive settings. And the point that I would make with respect to our report on a global basis is that if we can encourage states to be more competitive between each other, then that encourages the country as a whole to have more competitive settings within jurisdictions, and that means that we can attract investment into Australia that we desperately need.

Let's remember that business investment is at a low point. We need to drive our productivity, and in order to drive productivity, in order to drive investment, we've got to have those competitive settings that underpins everything.

Laura: Bran, we see in the AFR today, essentially one business that pointed out that the reason why it's so hard to do business in Victoria is because of their energy system. Now it's part of the East Coast market, but this particular business has taken aim at Victoria's lack of embracing of gas, let’s say. Do you see that as a big problem for the state?

Bran: Well, I think what we need to do, sort of broadly, is look at gas as a really important transitional fuel source. And it really doesn't matter whether or not we're talking about gas for the purposes of business or household consumption or for industrial use or for power generation or for the purposes of fulfilling our requirements with respect to export partners, gas is absolutely critical, and it will be for at least the foreseeable future.

So, what we've been advocating for some time, and what I really want to stress is that the best thing that we can do within states, but also at a commonwealth level, is work towards achieving a very clear roadmap, a 10-year plan or more, for what is required. What are the technology settings. What are the policy settings. What can we do to lock in certainty for businesses so that they've got the confidence to invest, and that's across all energy sources.

Laura: That’s the Federal Government jurisdiction, though, right? We're having this whole debate at the moment about how cheap and reliable renewables are. That's got to be one of the biggest impediments to business investment in this country, surely.

Bran: Well, having that lack of clarity, in terms of what a very clear plan is, where we can keep policy settings in place for a sustained period of time, trying to get to a point where business –

Laura: What’s not clear? Because we have targets, we have 80 per cent renewables by 2030. Is it the mix that's not clear?

Bran: That's right. So, we have targets for 2030 and we're working, of course, right now, towards setting targets for 2035 and I wish to be clear in this regard, it's really important that we have targets. Like any large endeavour if you're going to set out to achieve something, it's important to know what your milestones are along the way. But what we're talking about is having clarity in terms of exactly what all the policy settings are and also what the technological settings might be.

So, what are the levers that we can pull along the way. That's what business is looking for in terms of confidence, so that it knows that these types of settings will be in place beyond electoral terms, that they will persist, and that therefore business can have that confidence that it needs to make investments for the long term.

Laura: You've upset a few people with this report Bran, I have to say. Victorians seem very territorial. We just had Stephen Conroy on the program with Pete just a few moments ago, and he described you as a political hack just using this report in a politically expedient way. What do you have to say to that?

Bran: Look, what I'd say is that Victoria is taking some positive steps, and we've seen already that it's speaking about how it can improve development opportunities around transport nodes. We've seen the same sort of steps being taken in New South Wales with transport-oriented development, but what I'm stressing with this report is that there is clearly room to improve.

So yes, Victoria is taking steps to improve what it's doing in terms of attracting investment, making its state a more amenable jurisdiction for development. But on the cost and regulation side of things, in terms of stamp duty, land tax rates, also in terms of payroll rates, and in relation to business licencing requirements, there are clearly steps that still need to be taken.

And what we would stress is that this is a report that we do every year, so we hope that states can use this as a basis for thinking to themselves, well, this is where I am this year, what do I need to do in order to improve my position going into next year.

Laura: Okay, Bran thanks so much for joining the program. I appreciate it.

Bran: Thanks Laura. Appreciate your time.