ECONOMIC STATEMENT —APRIL 2004

A Review of:

Victoria: Leading the Way

This statement refers to 19 key actions the concept being that the Bracks Government is building a more competitive Victoria.

 The main thrust of the Governments claims in relation to our industry concern 2 items that will have a direct implication to the costs associated with our businesses.

Tax cuts: the Bracks Government will provide land tax relief worth in excess of $1 billion over the next five years. The tax-free threshold is being increased from $150000 to $175000 and the top land tax rate will drop from 5% to 3.5% by 2006-7.

Members should be aware however that there will also be an upward adjustment over two years to the land tax brackets between $675,000 and $1,080,000.

Changes to WorkCover Premiums: The Bracks Government has undertaken to reduce the average WorkCover premium by 10% in 2004/2005. There is a strong commitment to simplify the process. Average WorkCover premium rates will be cut by 10%, reducing the average premium to 1.99% of payroll. Members should take advice on the implications on their individual businesses, as the above rate reduction is being made on the advice of the Victorian WorkCover Authority in light of a new method to be introduced for calculating premiums.

 A further 5 actions may have some benefits for our industry but it is difficult to find the specifics of how.

These are:

• Establishing the Victorian Competition and Efficiency Commission
• Cutting red tape in development approvals
• Taking new directions in industrial relations

Maintaining our low cost and reliable energy advantage

In conclusion whilst there are some specific positives in this report, the disappointing thing about this statement from our point of view is the lack of substantive contributions. For example Action 7,

Make it Happen in Provincial Victoria: Phase 2.

This sounds good but close examination reveals that there is to a $2.8 million dollar campaign-targeting relocation of Victorians and to assist councils to drive new economic and investment opportunities on a regional basis.

We would have thought less rhetoric and more action in a specific investment would have been of interest to Members with a Regional operation.

Pat and Mark

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