Event: BCA Chief Executive Bran Black interview with Patricia Karvelas, RN Breakfast, ABC Radio National
Speakers: RN Breakfast, Host Patricia Karvelas; Business Council of Australia Chief Executive Bran Black
Date: 3 December 2024
Topics: Regulation Rumble report, productivity, Woolworths distribution centre strikes

E&OE

Patricia Karvelas, RN Breakfast Host: Bran Black is the Chief Executive of the Business Council of Australia and joins me now. Bran welcome.

Bran Black, Business Council Chief Executive: Thanks so much for having me on the show.

Patricia: Well, you can't go to results without finding out what the metrics are I think, so what are the metrics? What do you determine as the best place to do business?

Bran: So, it's a really good question. We look at a few key things across two broad categories. The two categories are planning and then with respect to regulation, we look at regulation and cost. So, on the regulation and cost side, we look at taxes on property, so that's land tax and stamp duty. We look at payroll tax, we look at workers compensation, we look at retail trading hours, and then we look at business licencing requirements. So that's how many licences would you need in order to set up a cafe or a childcare business or a small retail business.

On the planning side, we look at efficiency, consistency, certainty and transparency. I guess to put that in English, what we try and do is look at the time associated with obtaining development approvals or running through a development approval process. We look at consistency, which means the level of standardisation of planning documents, which makes it easier for home builders and developers to negotiate planning processes. We look at certainty, which looks at statutory time frames for different aspects of the approval process, and then the transparency with respect to the decision-making process itself. Can you access data, can you access information about how your decision has been made?

Patricia: Okay, that's interesting. And so, if I can be really blunt, is it really the fastest and cheapest place to do business?

Bran: Well, yes, there's a combination of different things that we look at, as I say, those are aspects of it. But if you look at, say, business licencing requirements, what we're looking at there is whether or not you need a fixed number of licences for a particular process, or whether you could have less.

So, for instance, in the Northern Territory they have licencing requirements in the low 20s for cafes and childcare centres. In other states, they've got requirements in the mid to high 30s. So, you ask the question, do you need that level of licencing in order for that type of business, or is that just additional red tape that could be consolidated or made more efficient in some way?

Patricia: Okay, so what makes South Australia the best place to do business in the country right now?

Bran: Well, South Australia has quite a few things going for it. For a start, it's got a great approach to payroll tax, it's got a very low rate, so that sits at just 4.95 per cent and it's got a high threshold, so that's the point at which the tax kicks in, and that's $1.5 million in wages. So essentially, in a nutshell, that means that from a payroll tax perspective, less businesses are captured, and they're paying overall less money.

Now that's the payroll tax. On the planning side of things, South Australia does incredibly well in all of these areas, whether or not you're looking at that efficiency, certainty, consistency or transparency point that I mentioned before, it does extremely well. One of the things that really stands out is that it has a single, consolidated approach to planning. It's got a single document that home builders and developers can refer to when they're looking at what the different requirements are for zones within this jurisdiction.

And that compares with other states that, in some instances, have hundreds of different planning documents, which creates inefficiency and uncertainty. So South Australia actually came first in both of those two key areas, regulation, and cost and planning. And that's why we say that it's the best state in the country to do business in 2024.

Patricia: Okay, and briefly, why is Victoria the worst? I'm assuming they'd probably contest that, but you make your case.

Bran: Look, there are a few things that we’d point to. Firstly, it's got a high payroll tax rate at 6.85 per cent. It's got a low threshold of just $900,000, it's got the third highest land tax rate and the highest stamp duty rate in the country. And it's also got pretty significant business licencing requirements.

I will say that it's got a few pluses going for it. Our reporting period takes us through to mid-2024 and since then, we've seen that the Allan government has made some useful announcements in the context of driving more development opportunities and scope for more homes around transport nodes. That's something that we're also seeing in other states.

WA has taken a great step in terms of reforming its planning system, so has the ACT. New South Wales has taken some really positive steps forward as well, in terms of development approvals around those key transport areas too. That's something that we are starting to see more of right around the country, and that's a very welcome sign, given that at the moment, we need to drive more new homes, achieve more supply so that we can help house Australians.

Patricia: And I'm really interested in this measure, given it's such a big deal at the moment, and has been for some time, to be fair, and that's building houses. Where is it the easiest to do that?

Bran: Well, the short point there is that we need to be doing much more, right across the board, everywhere. So, we've got a target nationally of 1.2 million homes. What that means is that we need to be building about nine homes for every 1000 people. At the moment, across the country, we're building six homes for every 1000 people.

What I would say is that even if you're looking at a jurisdiction like South Australia, which has got a fantastic planning system right across the board, there is always scope to improve. Our rankings aren't absolute. It doesn't mean that you achieve a certain milestone, and after that, you can pat yourself on the back and say, well, nothing further to do here, nothing further to see. There's always scope for improvement, and we're trying to encourage this sense of competitive federalism, so states are actively competing with one another to drive investment into their jurisdictions.

Patricia: Just on another issue before we say goodbye, I want to move to this issue around the Woolworths strike. The BCA has been quite vocal about productivity, particularly in relation to the ongoing strike involving Woolworths distribution workers. Why do you say their demands set a bad precedent?

Bran: Well look, what we're saying is that you have to have productivity on the table in the context of any wage discussion. And the information that we have is that the union is steadfastly refusing to allow productivity to even be part of the discussion. We want to see higher wages. Everybody wants to see higher wages. That's what we need to strive towards.

But at the same time, we've got to remember that six in every seven jobs comes through the private sector. We've got to remember that ultimately, it's when businesses do well that the country is doing well. So, part of that negotiation has to include productivity, and we're saying, keep that on the table as part of these negotiations.

Patricia: Thank you for joining us. I really appreciate your time.

Bran: It’s my pleasure. Thanks for having me.