Commerce Queensland has written to the Reserve Bank of Australia to indicate the dramatic impact the Bank’s monetary policy settings are having on the Queensland Economy, the State’s Tourism Industry and Far North Queensland. 

There is little doubt that interest rates are now increasingly hurting Queensland businesses in three separate and significant ways through a direct increase in the cost of finance, the dent it has on consumer spending and perhaps most importantly the unintended negative consequence it is having on the appreciation of the Australian dollar.  Any further monetary policy decisions must take into account the unintended impact of destroying our extremely valuable exporting and tourism industries. 

Accordingly Commerce Queensland strongly urged the RBA Board, when it meets over the coming months, to focus on the long-term interests of Queensland’s business community and recognise that recent changes in interest rates have had a profound negative impact.

For further information please contact Nick Behrens, State Manager – Policy, by email at nbehrens@commerceqld.com.au.

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Commerce Queensland has written to the State Treasurer to recommend the immediate roll out of all infrastructure projects committed to by the State Government in Far North Queensland and on the Gold Coast. 

These regions are highly dependent upon tourism as a driver of economic growth and have been significantly and negatively impacted on by rising fuel prices, the appreciation of the Australian dollar and airline decisions to reduce services. 

Commerce Queensland has identified infrastructure spending as a means of supplementing economic activity in these affected regions for the present time.

For further information please contact Nick Behrens, State Manager - Policy, at nbehrens@commerceqld.com.au.

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Commerce Queensland is scheduled to meet with the Minister for the Environment on 5 August 2008 to discuss the Government’s proposed changes to the legislation governing the environmental remediation of sites following industrial accidents.

These changes will make landlords and other parties liable for costs of off-site environmental remediation where the pollution originated from an industrial accident on their property. 

Commerce Queensland has grave concerns about the proposed amendments. The EPA has however been fairly receptive to those concerns and is currently considering our request for a detailed assessment of the economic impact of the changes and alternative options. We are currently awaiting the outcome of those considerations.

For further information please contact Sarah Kearney, Senior Policy Advisor, at skearney@commerceqld.com.au.

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Commerce Queensland believes the decision by the Australian Fair Pay Commission (AFPC) to increase minimum wages by $21.66 per week (4.2% at the minimum wage level) from October 2008, to be economically risky.

During 2008-2009, there will be many factors limiting the capacity of employers to increase wages by this magnitude including the rising costs of capital, falling margins and profitability, and declining consumer confidence and discretionary demand.  This minimum wage increase is likely to flow on into price increases. 

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CPI growth was 4.5% over the year to June 2008 and 1.5% over the June quarter. Underlying inflation was 4.4% over the year and 1.1% over the quarter.

The CPI data shows that inflationary pressures continue to be present in the Australian economy. The significant rise in inflation over the year is being compounded by oil and interest rate increases.

The RBA is expecting inflation to peak in the June quarter and to begin to fall back within their target band of 2-3% over the next two years. This figure will certainly make the September number absolutely critical. Should inflation remain higher than the RBA’s forecast, expectations could become a significant factor in entrenching growing inflation through the interaction of wages and prices.

The CPI result slightly exceeds market forecasts but we consider it to remain in line with RBA expectations, as only last week Governor Stevens noted that CPI inflation may rise before it comes down due to strengthening global oil prices.

With regard to the next meeting of the RBA, Commerce Queensland still considers slowing domestic demand from higher fuel costs and credit costs together with slowing world growth supports the view that further interest rates rises are not required. This is particularly the case as both official and more importantly non-official rate rises have not yet had their full effect in slowing the economy. However, at this stage it appears unlikely that interest rates will fall in the short-term.

For further information please contact Nick Behrens, State Manager - Policy, at nbehrens@commerceqld.com.au.

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Commerce Queensland has prepared an economic submission to the 2008 State Wage Case.  Key points raised within the Submission include:

• Skills shortages, interest rates, direct and indirect wages costs and the level of demand / economic activity are the largest constraints on business growth at present.
• A moderation in world economic growth, tighter credit conditions and significantly higher interest rates will significantly slow growth in the national economy from 3.5% in 2007-08 to 2.75% in 2008-09.
• The Queensland economy grew by 3.75% in 2007-08 (5.7% in 2006-07) with growth forecast to accelerate slightly to 4.25% in 2008-09.
• Business investment increased by 7.25% in 2007-08 (17.9% in 2006-07) and will strengthen slightly to 9.25% in 2008-09.
• CPI is estimated to increase to 4% in 2007-08, following an outcome of 3.3% in 2006-07 and is forecast to ease to 3.5% in 2008-09.
• Employment growth eased to 2.75% in 2007-08 (4.6% in 2006-07) with the unemployment rate at a 34-year low of 3.75%.
• Business confidence has fallen to a historic low and is attributed to higher interest rates, reduced consumer confidence and rising fuel and energy prices as impacting negatively on confidence.
• Queensland’s population is forecast to continue to grow at its long run rate of 2.5%.
• Growth in the Labour Cost Index is forecast to remain steady at 4.5% in 2007-08 & 2008-09.
• Economic growth is projected to remain at its average growth rate (4.5%) over the longer-term.
• Queensland’s business community has indicated that they are willing to absorb an increase in wages up to $15.  Any increase above this amount will impact negatively on profitability, investment, employment and force business to raise average selling prices.
• Commerce Queensland believes the decision by the AFPC to increase minimum wages by $21.66 per week to be economically risky and is likely to flow on into price increases.
• Queensland’s economy’s ability to absorb the same level of wage increase that occurred under the Western Australian Decision is considerably less.

For further information please contact Nick Behrens, State Manager - Policy, at nbehrens@commerceqld.com.au.

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The Minister for Immigration and Citizenship has announced the establishment of an independent integrity review process to be conducted by industrial relations expert Ms Barbara Deegan, following concerns raised about the Subclass 457 visa program.

The Subclass 457 Integrity Review will report periodically to the Minister and the Deputy Prime Minister, with a final report to be presented in October 2008.  Three issues papers on the Subclass 457 visa arrangements will be released covering:

• Issues Paper no. 1 - Minimum Salary Level and Labour Agreements;
• Issues Paper no. 2 - English Language requirements and Occupational Health and Safety issues; and
• Issues Paper no.3 - Integrity and Exploitation issues.

Issues Paper no. 1 has been released and the closing date for submissions is Friday 8 August 2008. Commerce Queensland will be preparing a response to this paper.

For further information please contact Jillian Fairbrother, Policy & Public Affairs Advisor, at jfairbrother@commerceqld.com.au.

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The Minister for Immigration and Citizenship, Senator Chris Evans, recently released a discussion paper seeking stakeholder feedback on proposed reforms to the 457 visa regime. This follows the $19.6 million commitment in the 2008-09 Budget to improve the processing and compliance of the temporary skilled migration program. 

The discussion paper proposes legislation to enable specially appointed officers with investigative powers to enter and search workplaces to determine whether employers are complying with their sponsorship obligations. The paper also proposes legislative amendments that will allow the department to share and receive information with other government agencies where that is currently not possible, such as the Australian Taxation Office in relation to whether a visa holder is being paid the correct amount. This legislative change was originally intended to go before parliament late last year but was delayed by the election.

The discussion paper also seeks feedback on additional potential obligations that sponsors may have in relation to temporary workers from overseas. 

Commerce Queensland has prepared a response to the DIAC Discussion Paper on Employer obligations under the 457 visa.

For further information please contact Jillian Fairbrother, Policy & Public Affairs Advisor, at jfairbrother@commerceqld.com.au.

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Commerce Queensland has provided a major submission to the National Review into the Model Occupational Health and Safety (OHS) Laws.

Commerce Queensland is committed to the achievement of a Workplace Health and Safety system for Queensland businesses where every person in the workplace has a safe place of work and a safe method of working.  The Chamber supports the creation of a Nationally consistent WHS framework that recognises employers and employees have a joint responsibility to ensure that workplaces are healthy and safe. 

Commerce Queensland believes that any Nationally consistent framework must embrace the following principles:

• A common sense and fair approach to determining the obligations of employers;
• Consistent enforcement of clear, workplace health and safety guidelines;
• A partnership-based approach to ensuring healthy and safe workplaces in Queensland;
• Encouraging employers to provide safer workplaces through incentives; and
• Raising awareness amongst employers and employees of the importance of improved Workplace Health and Safety.

For further information please contact Nick Behrens, State Manager - Policy, at nbehrens@commerceqld.com.au.

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AusIndustry is currently running a free customer briefing on the Enhanced Project By-law Scheme (EPBS), held on Thursday 31 July at the Royal on the Park Hotel, from 8.30am - 12.00pm.

The Enhanced Project By-Law Scheme (EPBS) provides tariff duty concessions for imported eligible goods for major investment projects of $10 million or more. The scheme incorporates an Australian Industry Participation Plan to encourage the use of Australian industry in projects and global supply chains and is applicable to projects in the mining, resource processing, food processing, food packaging, manufacturing, agriculture, gas supply, power supply and water supply industries.

This is a unique opportunity to fully understand the pathway to a successful EPBS application and to obtain the latest information first hand from key EPBS managers. As a major project investor or service industry practitioner you will not want to miss this important and free AusIndustry Briefing.

For further information on EPBS including a fact sheet, EPBS guidelines and application forms or to register for this event please visit www.ausindustry.gov.au.

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