NSW creates its own Productivity Commission
The NSW treasurer, Dominic Perrottet, has announced the creation of the state’s own Productivity Commission at a breakfast meeting with the NSW Business Chamber and Sydney Business Chamber.
Modelled on the well respected federal Productivity Commission, the Berejiklian government’s own high-powered advisory body will be asked to tackle some of the state’s most pressing challenges including the spiralling cost of housing and cost of living hikes.
The new commission will propose ways to make NSW “the easiest state to move to” and to make it simpler to do business in the state, helping to drive the “next frontier” in the state’s ongoing programme of regulatory reform.
Perrottet argued the move constitutes “the biggest strategic shift in decades when it comes to a concentrated focus on productivity in NSW,” and hoped “the NSW Productivity Commission will give us huge momentum to change NSW for the better.”
Mr Perrottet said it will play a crucial role in kick-starting productivity as the current boom in infrastructure spending begins to wane and the effects of long-term challenges including the state’s ageing population become more apparent.
“The gains from our massive infrastructure boom will last a long time, but not forever,” he said.
The commission will reside within the state Treasury and be set up with help from Professor Gary Banks, who headed the federal body for 15 years from 1998 to 2013.
The federal Productivity Commission and its predecessors have shaped major economic, social and environmental reforms in Australia since the 1970s, driving reforms from tariff reductions and the deregulation of the financial system to the more recent establishment of the National Disability and Insurance Scheme.
NSW’s new commission will “drive a microeconomic reform agenda” to boost the state economy. The federal Productivity Commission recently estimated that reducing regulatory compliance costs by a fifth would boost NSW’s gross state product by $6 billion over time.
Mr Perrottet also announced the appointment of the state’s first chief economist to give NSW Treasury a “new voice and a fresh stream of big ideas” and bolster the department’s role as a “thought leader in Australia’s economic debates.”
He also used his speech to once again criticise the way the GST is carved up between the states. “Under our current federal system, when a state like NSW does the hard yards, it’s the non-reforming states who soak up the benefits through the distribution of GST,” he claimed. “We cannot persist with a system that penalises states that do the right thing, and subsidises the rest.”
NSW Business Chamber welcomes the move
The appointment of a Productivity Commissioner to tackle costly regulation and boost productivity in New South Wales has been backed by the NSW business chamber, the state’s peak business organisation, who believe the move will appeal to the business community.
Highlighting the role the commission could play in tackling business issues, the NSW Business Chamber called for a reduction in business costs, as firms across NSW incur costs of $10 billion each year meeting regulatory strictures across all levels of government.
“We must unchain regional business from costly and redundant regulation which restricts job creation and economic opportunity,” NSW Business Chamber regional manager Joe Townsend said, in welcoming the appointment.
“The performance of the NSW economy is now envied by every other state and territory in Australia, but to stay number one we must tackle existing regulation and make sure any new regulation is as efficient as it can be.”
“The creation of a body performing the functions of a NSW Productivity Commission was a key recommendation of the NSW Business Chamber to the Greiner Review,” noted Mr Townsend, who also praised the acceptance of the Chamber’s call for an online community portal allowing people to register concerns with the operation of regulation.”
Mr Townsend highlighted the issue of high payroll taxes and called for its reduction to increase the attractiveness of the state for small and medium sized enterprises. “Payroll tax is simply a tax on employment, and one which restricts regional businesses growth and employing more staff,” he said.
“Presently a NSW business who has a payroll of $1.1 million pays an extra $19,075 per year in payroll tax when compared to the same business just over the border in Queensland. It is imperative governments do all they can to assist business to grow and remove the barriers to employing more Australians, and payroll tax is one of these barriers.”
Other items flagged for consideration by the Productivity Commission will include the ‘build to rent sector’, common expiry dates for multiple vehicles, a review of government procurement practices and mutual state recognition of licenses and certificates.
“We need to create an environment that supports a thriving private sector for the benefit of NSW as a whole,” Mr Townsend said.
