WA's two peak business groups have delivered an at-best lukewarm reception to the state budget, with tax policy coming in for criticism.
WA's two peak business groups have delivered an at-best lukewarm reception to the state budget, with tax policy coming in for criticism.
Chamber of Minerals and Energy chief executive Reg Howard-Smith expressed concern about the increase in iron ore royalties, while Chamber of Commerce and Industry of WA chief James Pearson criticised the failure to cut payroll tax.
Mr Howard-Smith said he was concerned the decision to lift royalties was taken to address an administrative anomaly. He was also concerned by a lack of genuine consultation with the mining industry.
"The industry is not opposed to royalty reform," Mr Howard-Smith said.
"We support genuine economic reform that protects against sovereign risk, improves the international competitiveness of the resources sector as an investment destination and promotes economic growth."
He said the royalty increase will coincide with the expected commencement of the Federal Government's Minerals Resource Rent Tax (MRRT).
"Now more than ever, it is essential that the Federal Government honours its commitment to fully refund all current and future State royalties. The CME has always maintained a preference for the State-based royalty system," Mr Howard-Smith said.
Mr Pearson said the budget seems to be positioning the government for the next election, and is less about dealing with the long term needs of the State.
"The budget recognises that the economy is not growing evenly, but it doesn't address the challenges faced by businesses across the State from rising costs and soft market conditions," he said.
"While the move towards cost reflective electricity prices for business will deliver long term benefits by encouraging greater competition, it comes at a time when many can least afford it.
"Cuts to payroll tax would have offset these higher costs, and removed a barrier to job creation."
Mr Pearson said the budget is financially responsible, in that it maintains the AAA credit rating and strong surpluses through the out years despite the revenue challenges posed by declining GST shares and a soft housing market.
"There are good measures to limit the growth in spending through the efficiency dividend on Government Trading Enterprises (GTEs), 400 voluntary redundancies, and the targeted review of low priority spending programs.
"Clearly, more needs to be done rein in spending. Forecast growth in spending is considerably higher than what was projected a few months ago, and the Government will once again fail to meet its own spending target."
The CME and CCI both welcomed increased funding for the community, health and social services sector.
Mr Pearson also welcomed increased funding for tourism.
