The Illawarra's largest business organisation has today joined with NSW Business Chamber in launched a comprehensive economic blueprint for NSW making 34 recommendations to re-vitalise the NSW economy.
NSW Business Priorities 2007 has found the five major challenges facing NSW to be:

1. Growing a dynamic workforce
2. Strengthening the performance of Government
3. Staying competitive
4. Renewing economic infrastructure
5. Meeting the challenge of climate change

“This is a major economic blueprint that lays out a plan to deal with skill shortages, high taxes, red tape, inadequate infrastructure, low growth rates and preparing for climate change”, said Mark Grimson CEO of the Illawarra Business Chamber.

“We have to move beyond apportioning blame and the political games that are inevitably seen in the weeks before an election, and ask the simple question - “what do we need to do to improve the economic opportunities for NSW?”

The recommendations of NSW Business Priorities 2007 include:

• Ensuring all future public private partnership (PPP) contracts are on the public record
• Introduction of “one in, one out” approach to government regulation
• Linking Ministerial salaries to publicly agreed performance measures
• A “use it or lose it” policy for Section 94 contributions to local Councils
• Cutting payroll tax rate by 0.75% over next three years
• Introducing the “Safer Workplaces Plan” as part of the planned OH&S overhaul
• Allowing WorkCover to provide safety advice and for the advice to have legal standing
• Greater flexibility in apprenticeships allowing for “fast tracking” of the traditional four year apprenticeships (more flexible than current limited arrangements)
• Continued effort from the NSW Government to reform the GST Agreement
• Repealing the exemption of State public servants from WorkChoices
• Establish a Ministerial Advisory Council on the Quality of Vocational Education in Schools

Other recommendations also include support for the direction of current government policies relating to a national scheme for carbon trading, implementation of the State Infrastructure Plan, embedding the State Plan throughout Government and support for continued cuts to Workers Compensation. Co-operation with the Australian Government through the COAG process has been a hallmark of success that must continue.

“I subscribe neither to the view that all is rosy in NSW, nor that we are on the verge of ruin. What I do say is that we need to have economic issues front and centre of the political debate if we are to ensure the long term prosperity of NSW. More needs to be done.

NSW Business Priorities 2007 makes the following observations regarding each of the major challenges identified:

1. Growing a Dynamic Workforce

“We currently have 47,000 job vacancies in NSW. Each vacancy is a lost opportunity for NSW. Demographic changes are going to worsen these shortages in coming years and this will have a particular impact on regional areas and the public sector.

“NSW is yet to fully appreciate the importance of having a greater alignment of our education and training systems with the wider business community. For example, the primary reason NSW has low apprenticeship completion rates is that we do not make it easy for apprentices to fast-track their training and learning.

2. Strengthening the performance of State Government

“The ageing of the population is going to create major challenges for NSW.

“We have to move quickly to create a new Federalism with the Australian Government and lift the performance of local government.

“This has to include a fairer deal under the GST agreement – and we are supportive of the Productivity Commission making recommendations on the existing process of allocating the GST.

“Michael Costa has correctly argued that in the coming decades, the NSW Public Sector needs to produce productivity improvements over and above the improvements generated by the private sector. This will be extremely difficult to achieve and that is why we support removing the exemption of the NSW public sector from WorkChoices. We should be encouraging and rewarding improvements to public sector productivity and not tying one hand behind the State Government’s back.

3. Staying Competitive

“It is a concern that only 4% of NSW Business Chamber members believe that the Government has effectively managed the cost of doing business. I believe there has been progress with a 20% cut to workers compensation costs and the abolition of the vendor duty. However, clearly more needs to be done.

“Payroll tax collections have surged 35% over the past five years. NSW has the highest payroll tax rate in Australia. Other States like Queensland and Victoria have been increasing the threshold or cutting the rate. A cut in the rate of 0.75% over three years could be paid for by using some of the proceeds of the surplus and efficiency savings. We have to get serious about improving the competitive position of NSW.

“We do need to introduce a policy of “one in, one out” in relation to regulation. “One in, one out” introduced by the Blair and Bracks governments, creates a regulatory constraint on the public sector. Such a constraint will force the public sector to question all regulation and to effectively ration it.

“Every business in NSW has experienced a OH&S system that is neither fair nor efficient. NSW has the highest number of prosecutions and fines in Australia, yet has workplaces less safe than the Australian average. The current system discourages safe workplaces and it needs to be reformed urgently.

4. Renewing Economic Infrastructure

“The run-down on infrastructure in the name of debt reduction has had a major impact on NSW. Fortunately Premier Iemma has reversed this approach.

“There are high levels of dissatisfaction by NSW businesses about the State of NSW infrastructure. I believe this dissatisfaction will be addressed as the State Infrastructure Plan is delivered.

“I do believe it is essential that we take a wider look at infrastructure and not assess it so narrowly that it ceases to act as a “nation building tool”. The real value of infrastructure is not in the revenue it might produce for the owner of the asset, rather it is in the economic value it creates for the community.

“We do need greater transparency in PPPs. However, greater transparency is needed in the PPP process to ensure continued public confidence and support for PPPs. As importantly, greater transparency will ensure that contracts entered into by the NSW Government are more robust and that the assumptions that underlie the contracts are tested publicly

5. Meeting the Challenge of Climate Change

“Responding to global warming will be one of the great policy challenges facing all governments in coming years.

“The world is warming and this will have implications for our entire ecosystem starting with the availability of a reliable and sustainable water supply and crop yields and eventually, the very level of global coastlines and human health.

“A national approach to this issue is essential and NSW must advance this through the COAG process.

For more information contact Mark Grimson on 4229 4722 or 0409 155240.

To download a copy of NSW Business Priorities 2007 click here

To download a copy of NSW Business Priorities 2007 - Executive Summary click here