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Queensland budget should focus on industry competitiveness

03 May, 2006

The Australian Industry Group has urged Queensland Premier Peter Beattie to boost spending on road transport infrastructure in the state's 2006/07 Budget, using a modest increase in State Government borrowings to do so.

The Australian Industry Group

In its pre-budget submission to the Queensland Government, Ai Group also called for a cut in payroll tax from 4.75% to 4.5% on January 1 to maintain the State's competitiveness and urged Beattie to take the lead in working towards national consistency on regulation.

Ai Group Queensland Director Andrew Craig said better road transport infrastructure was a vital ingredient in Queensland industry's ability to successfully meet the challenge of intensifying global competition.

"The need for efficient road transport networks is rapidly growing in importance and improving our roads is crucial to ensuring Queensland companies are in a position to more closely integrate with global supply chains," Craig said.

"While recognising that considerable expenditure is contemplated under Queensland's infrastructure plans, Ai Group believes that improvements to road infrastructure should be brought forward as far as possible to ensure the growth of Queensland industry is not hampered by inadequate road transport.

"This is an area that is easily dealt with and should be addressed quickly. Ai Group urges Beattie to rebalance the State Government's existing infrastructure priorities and consider lifting State borrowings to act on roads now."

Craig said it was important for the Queensland budget to focus on enhancing the competitiveness of industry through measures aimed at reducing business costs and revitalising incentives to invest in innovation and product development.

This was particularly important given Queensland's rapid population growth and the prospect of a reduced share of GST revenues, he said.

"There is no room for complacency," he said.

"If Queensland industry is to continue providing jobs for the expected influx of new arrivals over the next 20 years and to help fund the growth in essential public sector service delivery, Government must work with industry to find new ways of strengthening our international competitiveness.

"In this regard, the measures proposed by Ai Group have little to do with special assistance for industry. They are more about removing obstacles to competitiveness and improving incentives for investment and risk-taking."

Ai Group believed Queensland's current payroll tax rate of 4.75%, while the lowest in Australia, was still acting as a deterrent to offshore investment in the State and involved high administrative costs to business.

Craig said reducing the rate to 4.5% would cost about $50 million in 2006/07 and about $105 million in the first full year.

Craig said Ai Group's budget proposals were both prudent and affordable and would allow the Government to continue running operating surpluses in future.

"Nevertheless, Ai Group also believes Queensland's relatively strong underlying budgetary position should be used prudently to continue strengthening the competitiveness of Queensland industry," he said.

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