Home' Scoop : Scoop 52 Winter 2010 Contents 24 scoop WINTER 2010
So what s on offer for the next three years?
In a bid to deliver more in areas such as health,
while still appearing fiscally responsible, the Federal
budget admits to record deficits for the next two
years, then a return to surplus in year three. Expert
opinion seems to agree this relies on hopelessly
optimistic long-term economic assumptions
including strong growth, record terms of trade and
levels of investment in the resources industry. All
this while punishing the resource industry with a
debilitating super-tax! It simply doesn t make sense.
There is an argument to say that the resource
industry should be more heavily taxed. Barnett s slow
and steady increases in royalties, in consultation with
industry, are a sound example of how to go about
it. Rudd s approach however borders on lunacy.
Australia was largely protected from the worst of the
GFC by its thriving resource industry -- damage that
and you damage the entire economy. A 40 percent
tax on profits over 6 percent is sheer madness.
Companies such as Rio Tinto claim that this
tax will threaten projects such as the planned
$11 billion Rio Tinto iron ore expansion. Rudd
maintains that the extent of the impact claimed by
industry is nonsense and that he is used to mining
companies "crying wolf ".
If you are not sure who to believe, then ask the
Canadians. Canadian MP Brad Trost was quoted
as saying that Canada is keen to cash-in on Rudd s
"blunder" and looks forward to seeing some of the
Australian business come north, while Canadian
finance minister Jim Flaherty declared the new tax
would give them a competitive advantage in the
global resources industry.
Or take a look at how the markets reacted.
In one day $9 billion was wiped off the value of
Australia s top 100 mining companies. While that
is not an accurate representation of the long-term
impact of this tax, it is a fair indication of how
negatively it is viewed by the markets. That s not
money lost by people who Rudd labels "billionaire
mining magnates", that s billions of dollars wiped
off the value of Australian superannuation plans
and retirement funds.
I spoke to one law firm who said that the day
after the announcement they received calls from
four clients to put on hold all four resource-related
merger and acquisition projects they were working
on. They are not alone. Make no mistake -- the
impact of this will be felt by all of us immediately.
Billions of dollars of potential foreign investment
in this country will be lost. The perceived increase
in risk, the loss of trust in our economy and the
long-term damage will last for years.
That s a lot of crying wolf! sm
Last edition we reported on the often
expensive and time-consuming process of
getting a liquor licence in WA. We looked
at the reasons for delays in getting through local
government authorities, the objections raised and
the double-ups and overlaps in the application
process and the public interest assessments to
prove that there would be no harm caused.
As we were going to press in late February, The
Red Tape Reduction Group -- commissioned last
year by then-treasurer Troy Buswell to identify
areas where bureaucracy was causing problems --
released its report and named liquor licensing as
one of the most commonly cited areas where red
tape was a problem.
The group identified reforms which it said
would save businesses nearly $8million a year and
made 15 recommendations for bureaucratic change
in the short, medium and long terms, including
the overhauling of the public interest assessment
guidelines and requirements.
They also recommended that low-risk bar
applicants be approved without their having to
get through council first, and that some of the
requirements for documenting every event at a
licensed premises be removed.
The authors said liquor licensing authorities
based every assessment on a worst-case scenario,
without taking into account a particular bar s
potential for trouble.
They cited the case of Kethrine Spence at
Birdwood Fruit Winery whose application to move
the winery 500m up the road ended up taking eight
months, requiring 100 separate forms to be lodged
and costing $34,000 in legal fees and charges.
The Red Tape Reduction Committee also called
for the licence approval process to be overhauled to
allow for a better balance between the competing
objectives of preventing harm from alcohol
and facilitating the development of the industry,
tourism and other hospitality industries.
It also said the Department of Racing Gaming
and Liquor be required to measure and publicly
report the time it takes to make its decisions, and
to measure the effectiveness of liquor regulation in
WA against international best practice. If no decision
has been made within six months of an application
being made, the committee recommends that it
should be considered approved.
Finally it calls for the Economic Regulation
Authority to do a comprehensive independent review
of the regulatory regime in the liquor industry.
The report is now being considered by the state
government which has made much of its committ-
ment to reducing bureaucratic hold-ups. An official
response to the report is expected soon.
CONGRATULATIONS to Peter Seeds of Kingsley,
Aurora Milentis of Morley and Michelle Rowe
of East Cannington, who have each won a copy
of Robbie by Jon Davison as featured in Scoop
Autumn 2010. They answered correctly that the
Robinson helicopter is made in California.
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