Topics: Royal Commission, Victoria’s economy, Jacinta Allan’s work from home Bill
E&OE
Jacqui Felgate, Host: I’m about to speak to Bran Black. He’s the Chief Executive of the Business Council of Australia about a couple of issues: one is the Royal Commission, and two is the ABS Labour Force figures were released today and what a surprise, Victoria’s unemployment rate continues to be the highest in the nation at 5.1 per cent.
Let’s ask him why. Bran, good afternoon.
Bran Black, Chief Executive: Good afternoon. Thanks for having me.
Jacqui: That’s okay. Let’s start with the Royal Commission. You’d be welcoming this, I would think, but in terms of how this will work, are you comfortable that this is going to make a difference?
Bran: Look, so far it looks as though it’s a really positive step in the right direction. This is something that I’ve been calling for now for 18 months at least, as soon as we started to see these revelations with respect to the Big Build.
And royal commissions are so very important because of the extraordinary powers that come with them, and what they mean is that you can genuinely have a good shot of getting to the bottom of issues, and that’s precisely what we need to do. People have speculated for a long time as to where the causes and incidences of corruption are here, but you just don’t know until you have the type of transparency that a royal commission brings. So we’re very pleased to see this.
Jacqui: What sort of impact has corruption on the Big Build had across the business community? I know we talk a lot about the 30 per cent extra that is mooted that every government project charges compared to, say, a builder in the private sector, how does that flow right across our economy?
Bran: Well, it’s difficult to say on a business-by-business basis, but you do know that ultimately this results in higher costs for everybody. And we saw that Watson SC in his report, Rotting from the Top, indicated that his estimate, and this was probably a conservative estimate, was a $15 billion cost. That’s schools, hospitals, roads that haven’t been built.
But to your point in terms of business, when you’re frittering away money in that way, then you don’t have as much scope to have a more competitive payroll tax rate or a more competitive stamp duty rate, and that’s really where the Victorian economy is falling down in terms of its capacity to attract more investment, and we see that track through in terms of unemployment figures. It’s really quite sad.
Jacqui: I had Sally Curtain on from VCCI yesterday, Bran, and we were talking about working from home, and she was saying we would have and still may lose so many employers in this in this state. They are moving interstate because of red tape, and the ABS figures came out today and again, Victoria has the worst figures when it comes to unemployment.
Bran: Yeah, it’s really sad. The figures today, 5.1 per cent. It was the same as the last figures, and what that means is that for 18 of the last 24 months, Victoria has led the way in terms of national unemployment. And as I say, that’s a sad state to be in, and one that we want to turn around.
We strongly believe, indeed, the evidence shows us that Victoria has been historically the national powerhouse for economic growth. We want to make sure that Victoria can live that dream once again. What we need to remember, however, is that with respect to a royal commission and even scrapping the work from home laws, which we say are absolutely necessary, those are steps that just stop Victoria from going further backwards.
What we really need to do is take the steps that are required to set it on the path to go forwards, and that brings me back to what I was saying before about a better payroll tax rate, a more competitive stamp duty rate, or a more competitive land tax rate, more flexibility in terms of business licensing, so that businesses see Victoria as a great place to do business.
Jacqui: What is the Government’s reluctance to act on those things you’ve just listed?
Bran: Well, I think for the last few years one of the challenges has been its fiscal capacity to do so. So if we do have this royal commission and if we’re looking genuinely at where there have been real incidences of money wastage then if we can go about making improvements there then that gives us a good basis for thinking through how we can utilise the state budget more effectively to attract investment. But it really does come down, at the end of the day, to having settings that stack up competitively as against other states.
I talk a lot at the national level about how Australia needs to improve the competitive nature of its taxation settings or its regulatory settings or the way in which it brings in investment from overseas. The same applies at a state level. States are competing for businesses investment and if one state is doing better than another state than businesses are inclined to invest more in that first state.
Jacqui: It’s just common sense isn’t it. It’s actually quite depressing really. Bran Black is the Chief Executive of the Business Council of Australia.