11/05/2004 - 22:00

Budget blues

11/05/2004 - 22:00

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IT’S budget time again, and this year it’s the rare double – two electioneering budgets for the long-suffering citizens of Western Australia to analyse.

Budget blues

IT’S budget time again, and this year it’s the rare double – two electioneering budgets for the long-suffering citizens of Western Australia to analyse.

From a business point of view, the budget reaction is very much reflective of the colour of the party putting the budget out, because they will want to see if the pork barrelling is sufficient to win or lose and election.

To put it more simply, Labor in WA is unpopular among business circles so business would have been hoping for a poor budget to weaken the case for a second term.

Most I have chatted to generally agree that while the State budget doesn’t wind back the taxes as they would have liked, it is unlikely to inspire much community enthusiasm for Labor come election time, either.

Freezing State charges for a year – whoopee do.

On the Federal front, business is happy to see the Coalition target voters because they want to see a Liberal Prime Minister running Australia for another three years.

Tax cuts and other titbits from the Federal Budget have a genuine chance of holding that swinging rump of voters (battlers) to John Howard for the crucial election expected in October this year.

That is good news, especially as tax is seen as a major issue to business people, both as taxpayers themselves and because of the negative incentive our tax rates are to attracting skills to this country.

 

Packer play

THE Packer family move on Burswood is an interesting development, which, like a game of two-up, could be positive or negative depending on which way you’ve placed your bets.

I am not talking about share price here – that is one for the market and I hope the current management and directors can extract the full value for the other shareholders of Burswood, as no doubt they are trying.

It is the risk and reward equation of having Burswood, especially the gaming side of things, fall into the hands of the Packers.

Generally, I’d prefer to see WA businesses stand alone rather than being branch outlets of the eastern States. This is particularly the case when national players come here and undercut local operators to drive them out of business.

This is hardly the case with Burswood.

While the casino is certainly suffering from competition with east coast rivals, its monopoly has ensured that has not occurred on home turf.

The truth is the punters from Asia are more interested in heading to the Crown Casino in Melbourne than trundling to Perth.

The only thing that can change that cost-effectively is having Crown send a bit of its business back here and that can only be done with the backing of its owner, the Packer family.

It’s a neat result that might just boost tourism and help Burswood regain its status.

Of course, that’s assuming that is the intention of the Packers.

The downsides are harder to be specific about but obvious to all.

The Packer family likes to use its clout and doesn’t mind meddling in politics when they see some benefits.

To date their interests in Perth, most particularly policy-sensitive assets such as a casino, have been small, so they haven’t had much need to play their hand here to any great degree.

Owning a casino here will change that. Already debate is raging about the introduction of pokies and, I have no doubt, they will pressure for whatever they want at Burswood … or beyond, if it suits their business plans.

With their massive investment power and media stakes, they have the clout to do that, which is something the State Government and all of us need to be wary of.

At least though, we can probably rely on their support for gaming machines to remain illegal outside the casino – which, in my view, is a good thing.

In summary, the positives outweigh the negatives in this particular case.

 

Legal reminder

JUST a gentle reminder about our Legal Elite which has only one week left open for nominations.

We are keen to make sure this year is as comprehensive as possible, so every nomination form counts, especially if as many of the categories as possible can be filled out.

As previously mentioned there is a case of Howard Park wine as a prize for one lucky nominator, but you’ll need to fill out at least eight outside categories to capture the prize.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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