The results of the latest Pulse Survey of Business Conditions reveal that interest rates are now regarded by business as the most significant constraint on business growth in Queensland, ahead even of labour shortages.

The Reserve Bank of Australian regularly monitors the quarterly St.George – Commerce Queensland Pulse Survey of Business Conditions and will be meeting with Commerce Queensland in coming weeks to discuss the June quarter findings in detail.

Commerce Queensland is in regular communication with the Queensland Office of the RBA and Mr Glenn Stevens, Governor of the Reserve Bank, to ensure the RBA understands the pressure facing business across the state.

Through these high-level meetings and the data contained in the Pulse Survey of Business conditions, Commerce Queensland is able to ensure the RBA is acutely aware of the impact interest rates are having on business, despite the state’s resources boom.

As a result of our ongoing representations, we are confident the RBA will consider the effect high interest rates have had on the previously resilient Queensland economy and announce a cut in the official rate on 2 September.

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

• Commerce Queensland's letter to the RBA regarding interest rates (PDF)

Business confidence fell sharply in the June 2008 quarter as higher interest rates, oil prices and insufficient economic activity unnerved businesses throughout Queensland.

The St.George Bank - Commerce Queensland Pulse Survey of Business Conditions shows that despite enjoying the benefits of the resources boom, the Queensland economy has not escaped the downwards trend in business confidence occurring across Australia.

Business expectations for the performance of the Australian and Queensland economies over the next 12 months have both continued to slide. The survey's benchmark performance indicators - general business conditions, sales & revenue, profitability, employment and average wages - have all deteriorated in the three months to June 2008 and expectations for the September quarter are also unsatisfactory.

Reflecting the fall in confidence levels, for the first time in 12 months labour recruitment and retention is no longer the number one constraint on business growth in Queensland. Interest rates have now jumped from the 10th most important constraint to the most important constraint over the last 12 months. Most businesses now believe rates are having a substantial impact on consumer and business confidence and spending.

For further information or to view the complete survey results please visit www.commerceqld.com.au/policy.

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Commerce Queensland has provided a submission to the Building and Construction Industry (Portable Long Service Leave) Regulation 2002, Regulatory Impact Statement increasing the levy from 0.125 per cent to 0.2 per cent.

Feedback from our members indicates that the proposed increase does not appear to have caused major concern or opposition, despite it representing a 60 per cent increase in cost.  Businesses indicated that it will not directly impact on operations as it is ultimately a cost borne by the customer.  However, some members believe the increase will impact on the commercial feasibility of some projects for clients which will in turn reduce member workload, turnover, staffing levels and profitability.

In summary Commerce Queensland does not support any measure that increases the cost of doing business.  However, our building and construction members do not appear to be unduly concerned at the proposed increase but in turn require increased transparency in the Scheme's operations by QLeave.

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

• Commerce Queensland's submission regarding the proposed amendment to Building and Construction Industry (Portable Long Service Leave) Regulation (PDF)

The Minister for Immigration and Citizenship 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.

The review will include the release of three issue papers on the Subclass 457 visa arrangements:

• Minimum Salary Level and Labour Agreements
• English Language requirements and Occupational Health and Safety issues
• Integrity and Exploitation issues.

The closing date for English Language requirements and Occupational Health and Safety issues
submissions is Friday 29 August 2008.

Commerce Queensland has prepared a response to the Minimum Salary Level and Labour Agreements issue paper and is currently preparing a response to the Language requirements paper. For further information please contact Jillian Fairbrother at jfairbrother@commerceqld.com.au.

• Commerce Queensland's Subclass 457 Integrity Review submission (PDF)

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The Federal Government recently released a Green Paper on the proposed Carbon Pollution Reduction Scheme. This paper outlines the likely features of that scheme, including its coverage, commencement date, permit and compensation arrangements and its governance framework.

Commerce Queensland has reviewed the Green Paper and while we are in principle supportive of the Scheme, we do have some key concerns about certain aspects of what is proposed. These concerns include the commencement date, permit allocation arrangements and the governance framework.

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 hit hard by rising fuel prices, the appreciation of the Australian dollar and reduced airline 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.

• Commerce Queensland's letter to the Treasurer regarding infrastructure spending (PDF)

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Commerce Queensland has raised concerns over the impact new Environmental Protection Regulation fee schedule may have on Queensland businesses.

In a submission to the Environmental Protection Agency (EPA) Commerce Queensland said the fee increases, some of which exceed 500 per cent, will be felt most by small to medium businesses. These concerns were placed in the context of the increasing cost pressures that many businesses are facing, including wages, fuel, energy, commodities and other inputs, and the limited capacity of many businesses to increase their prices in response to those cost pressures.

While we would prefer for the EPA to reconsider its new fee schedule, we have suggested that at a minimum they should consider phasing the new fees and providing businesses with adequate notice so that the new fees can be factored into budgeting processes. The EPA has advised that it is currently considering submissions received and is likely to release the final version of the Regulation later this year.

For further information please contact Sarah Kearney at skearney@commerceqld.com.au.

Commerce Queensland believes the decision by the Australian Fair Pay Commission (AFPC) to increase minimum wages by $21.66 per week and by the Queensland Industrial Relations Commission (QIRC) to increase minimum wages by $23.60 per week to be economically risky.

Already struggling with increased transport costs, shrinking margins, and declining consumer confidence, Queensland businesses will have not choice but to pass on the wage increase to consumers through increased prices.

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

• QIRC Minimum Wage Rise will significantly impact Queensland Business
• AFPC Minimum Wage Rise will significantly impact Queensland Business

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The Queensland Parliament has passed the Clean Energy Act 2008 which provides for the introduction of the Smart Energy Savings Program. Reporting requirements for major energy users take effect in 2009-2010.

The Program aims to improve the use of energy by Queensland business with medium to large energy consumption.  Business that consume energy above these thresholds will be required under legislation to participate in the Smart Energy Savings Program and therefore will be required to audit their energy use, identify energy savings measures, develop an Energy Savings Plan, and publicly report on the measure or measures they are implemented through the Plan.

For further information please contact Jillian Fairbrother at jfairbrother@commerceqld.com.au.

The Federal Government's Australia's Future Tax System review (Henry Review) discussion paper will be released in late August. 

In May the Treasurer, Wayne Swann announced a comprehensive review of Australia's tax system. Currently Australia has at least 125 separate taxes, yet just 10 of these account for 90 per cent of total tax collected. The review aims to create a tax structure that positions Australia to deal with the demographic, social, economic and environmental challenges of the 21st century and enhance Australia's economic and social outcomes. The review will encompass federal Government and State taxes, except the GST.

The review will be conducted in several stages. An initial discussion paper has been released and is available from the Commerce Queensland website (PDF). The review panel will provide a final report to the Treasurer by the end of 2009. Commerce Queensland will be providing a detailed submission to the review.

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