Speakers: Drive, Host Jacqui Felgate; Business Council of Australia Chief Executive Bran Black
Topics: Royal Commission into Victoria CFMEU contracts, investment, business confidence
E&OE
Jacqui Felgate, Drive Host: On the line now is Bran Black, Chief Executive of the Business Council. Appreciate your time today.
Bran Black, Chief Executive: Thanks so much for having me on the show.
Jacqui: So, how would you describe the state of the economy right now in this state?
Bran: Well, the unfortunate thing is that it’s not doing very well at all. Indeed, when we did our rankings for the purposes of our annual Regulation Rumble report, when we rank all of the states and territories against one another as to whether, or which one is the best for investment, Victoria came last, and it’s done that now for the second consecutive year.
It really fell down in terms of its regulatory performance, so in relation to business licensing and in relation to land tax and stamp duties. But what is particularly challenging is that when you layer on top of that, these extraordinary procurement challenges that have been revealed through the work of the administration and the report of Geoffrey Watson, it just underlines the point that Victoria is not a good place to invest now at all, and we need a royal commission as a consequence of that.
Jacqui: So, how would you describe, and what do business owners say to you when you talk about business confidence in this state?
Bran: Well, they say that they’re not confident and that they’re not looking to do more investment in Victoria, and that it’s particularly challenging. We know that Victoria has led the country in unemployment for about 17 of the last 18 months. That’s not a statistic that anybody should be proud of. But what concerns us most here is that in order to restore that sense of confidence and trust, you’ve got to first address some of the core issues.
So yes, whatever steps that can be taken that we’ve pointed to in our reports, as I mentioned, around stamp duty and land tax and so on. But there is a fundamental concern here in terms of trust in procurement processes, and that does need to be addressed. And what we’ve seen over the last week is that there is just insufficient power attached to the existing investigative processes. And the result of that is that we need to look further. And again, that’s why we say a royal commission is so important.
Jacqui: When you look at New South Wales, for example, and their ICAC and what we have here, which is essentially a ‘toothless tiger’, that’s what you’re talking about, isn’t it?
Bran: Well, it’s specific powers and processes that make a royal commission important. So what makes a royal commission effective is that it can compel documents, it can compel people, and it’s not just people and documents from within government, you can do that from anywhere, from anywhere within government or outside of government.
What’s also critical in these sorts of situations is that you want to publicly restore a sense of confidence and trust. When you’ve got a royal commission, you’ve got a public, transparent process, importantly, that makes findings and recommendations.
The police, of course, have all these powers, but they don’t undertake the public processes, and they don’t make findings and recommendations. And the findings and recommendations are so important because that gives people a basis for saying, “Right, this is what the problem is. We know how to fix it. Let’s get on with the job of doing so.”
Jacqui: And as for the Business Council, how long do you think it will take Victoria to recover from the economic mire that we’re in? Because I think a lot of us, Bran, we’re devastated to see the way that the state has gone, and when you talk about unemployment and when you talk about investment, for all of us, we just feel so sad that no one wants to come here and do business.
Bran: Well, I must say, I feel sad as well, and I’m not a Victorian. My sense is that these are the types of things that can be turned around, but there needs to be a very clear-eyed focus on the real problems and the issues that have unfortunately put Victoria in this place.
Now there are some green shoots. We’ve been pleased with the steps that the government took with respect to planning, and in terms of its national ranking, Victoria is around the middle of the pack in that regard. But I mentioned before the position in terms of payroll tax, the position in terms of stamp duty, and also the sheer number of business licences that are required to operate in the state.
What that says is it’s really hard to do business. And so, our message is, get on with that work, cut the licenses, reduce the payroll tax rates, and make sure that there’s a better approach to looking at stamp duty, and that’s when businesses will start to say, okay, if I’ve got a choice between one state and another, noting that there is, at the end of the day, competitive federalism at play to attract investment, those businesses will make a decision to invest in Victoria, and I want to see more investment in Victoria, because Victoria has been for so many decades, the powerhouse that has driven the country.
Jacqui: Are we number one at anything anymore?
Bran: I couldn’t comment on that, certainly not in terms of the prospect of attracting investment. But there is one point that I do want to emphasise, it’s the one line that stood out to me in Geoffrey Watson’s report, and if you don’t mind I’ll read it, it says, “I’ve been left with the empty feeling that the secular Victorian branch for CFMEU was no longer a trade union, it was a crime syndicate.”
I think that tells you everything that you need to know. If there is organised crime at play, precisely that is the time when you need to take extraordinary steps, and a royal commission is an extraordinary step to take, yes, but the circumstances call for it.
Jacqui: Appreciate your time, that is Bran Black.