Page 4073 - Week 13 - Thursday, 10 November 1994
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MS FOLLETT (Chief Minister and Treasurer) (3.38): The subject of this MPI, Madam Speaker, is an old chestnut that is raised regularly. I think Mr De Domenico was the last one to raise it, but I do not think I have ever heard it raised with less substance and less detail than it was today by Mr Stevenson. It is a fact that the Government is acutely concerned with the need to minimise any genuine impediments facing small business and investment growth. One of the Government's priority tasks, a very early task, was to give the issue of the impact of taxes and charges and business costs as a reference to the Economic Priorities Advisory Committee. EPACT looked at these issues and they consulted with various industry and business bodies. The general conclusion reached by EPACT was that there were no major areas where ACT businesses were disadvantaged compared to other States, and very few examples of overregulation were uncovered.
I am sure that members would be interested to know that a reasonably recent survey conducted amongst members of the Metal Trades Industry Association indicated that State and local government charges and State taxes and fees represented only 2.9 per cent and 1.7 per cent respectively of total operating costs in 1992, while Federal taxes, excises and duties represented only 3.8 per cent of costs. I think this illustrates, Madam Speaker, that, whilst those government taxes, charges and fees are important, they are only a small component of the overall operating costs for business. We need to keep that matter well and truly in perspective. Furthermore, Madam Speaker, the recent McKinsey report on impediments to business investment in regional Australia concluded that taxes and charges levied by States and Territories were not significantly different across States. Only 5 per cent of businesses rated red tape as an impediment to business investment, but almost three-quarters of businesses said that lack of sales and demand was the biggest barrier to investment. Madam Speaker, as can be seen, the rhetoric of red tape is, I believe, continually being overstated.
The implication in the MPI that government taxes and charges and red tape are an impediment to small business growth is simply not borne out by the facts. One of those facts is that we have recorded strong growth in both the number of, and employment in, small businesses since 1988-89. Over that period the number of small businesses has grown by 26 per cent, compared to only 8 per cent for Australia. Employment grew by about 24 per cent, again compared to 8 per cent for Australia. Investor interest in non-residential property in the ACT has picked up in 1994, with increased sales and building activity. Figures on the value of private sector non-residential building activity commenced in 1993-94 signal an increasing trend in private sector interest in the ACT non-residential property market. A very significant example of this was the recent announcement of the sale for $100m of the four remaining buildings owned by White Industries in the Civic complex developed during the 1980s. The yield, rent and vacancy levels in the local property market reflect the stable nature of the Canberra market. This translates to an ongoing investor confidence in the market. This was supported only this morning by speakers at a Richard Ellis property breakfast who drew a positive picture of the Canberra property market based on stability and long-term investment opportunities and continuing high rent levels. As I have stated before, the ACT under this Government has not experienced the boom and bust syndrome of other capitals. This gives greater confidence to investors, to landlords and to tenants alike.
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