The state’s tourism and events industry will use Victoria Tourism Week, starting today and running until Saturday, to show Victorians the economic and social value of the industry.

Victoria Tourism Week, a joint initiative between industry organisations Victoria Tourism Industry Council (VTIC) and Destination Melbourne, will feature events throughout the state for tourism operators, industry employees and the public, including forums, workshops, information exchanges and open days at Visitor Information Centres.

This year’s event will also honour VTIC CEO Todd Blake, whose recent passing is an enormous loss to Victoria’s tourism industry. Todd was instrumental in the formation of the inaugural Victoria Tourism Week and was to have been actively involved in this year’s event.

Victoria Tourism Week, now in its second year, launches with the inaugural national Tourism & Events Excellence Conference to be held at the Melbourne Cricket Ground from today until Wednesday.

The conference will focus on excellence in the tourism and events industry – a characteristic Todd Blake exhibited in his long association with the state’s tourism and events industry.

Inspirational leaders from across the industry – and the world – will present cutting-edge case studies and participate in interactive discussions at the conference.

This prestigious event features speakers including Tim McFarlane, acclaimed producer for Andrew Lloyd Webber; Daniel Levine, Executive Director of The Avant-Guide Institute, New York; and Geoff Manchester, Managing Director of Intrepid Travel.

Other notable events include the tourism industry Amazing Race, Tapping Into Tourism – Local Council Tourism Breakfast and Tourism Industry Leadership Program Alumni Dinner.

Destination Melbourne Chief Executive Chris Buckingham says Victoria Tourism Week is an opportunity for the industry to show Victorians the value of the industry.

“In its most simple sense tourism generates jobs that keep people close to their community. Good tourism investment delivers more than jobs. If tourism is developed with vision it can enhance the social and economic wellbeing of an entire community,” says Mr Buckingham.

The Minister for Tourism, the Honourable Louise Asher MP, says Victoria Tourism Week is a great opportunity for the industry.

 “To reinforce Victoria’s position as a premier tourism destination, it is essential that we address the challenges facing the industry. This is one of the objectives of Victoria Tourism Week, along with examining ways to improve the quality of the visitor experience and helping to identify meaningful career paths and skill shortages within the industry.

“Tourism is a significant economic driver for Victoria, contributing $15.2 billion to the Victorian economy and employing 193,200 people across the state,” says Ms Asher.

Regional Victoria will also be actively involved in Victoria Tourism Week as well, with several Visitor Information Centres around the State opening their doors for open days showcasing their local tourism industry, as well as many other regional activities.

For more information please visit: www.victoriatourismweek.com.au

Wayne Kayler-Thomson is the former Chief Executive Officer of VECCI and current Deputy Chair of VTIC.

Major retail chains like Colorado, Borders and Angus and Robertson are shedding jobs hand over fist, and the Federal and State Governments are doing little to assist.

In fact, in the face of retail difficulties, Federal Government agencies are tightening the screws on retail even further.

The Federal Government itself is planning a carbon tax, and an out-of-touch Reserve Bank has indicated that it will raise interest rates even further – after a quarter of negative growth, this could even trigger a recession.

Victorian consumers faced two elections last year, contributing to uncertainty and weaker consumer confidence.

Victoria has also been experiencing inclement weather, and consumers have had to contend with interest rate, power, water and fuel price rises – making it harder for shoppers to part with their money and contributing to tough times for retailers.

The retail sector is a large employer made-up of many small businesses. Many of the factors contributing to sluggish retail figures are set to continue – it’s time the Federal Government seriously thought about some relief for the sector. For example, a strategic cut in some personal income tax rates may provide some level of stimulus.

At the State Government level, payroll tax is a tax on jobs, making it harder to employ Australian labour in the face of overseas online competition. Industrial restrictions on employers hiring students and casuals for short periods should also be lifted to improve flexibility.

The current debate surrounding immigration numbers also has repercussions for the retail sector: not only does a reduced intake affect Australia’s ability to tackle its skills shortage but it also limits the base of consumers able to contribute to retail sales.

So many jobs and livelihoods depend on a vibrant retail sector – the Federal Government needs to ensure the sector regains its vibrancy.

The Maritime Union of Australia (MUA) is choking off Australia’s key trade routes by threatening to ramp up its industrial action against stevedore Patrick.

Patrick claims that the MUA’s actions will cut container trade by up to half.

While we are pleased that East Swanson Dock, Melbourne, has been excluded from the work bans, the MUA’s actions will slowly but surely choke off Australia’s container trade.

This trade has been rebounding in the wake of the global financial crisis, and Melbourne will still be disrupted by the action at other ports.

This action has the potential to endanger our competitiveness, disrupt just-in-time manufacturing and hurt our international reputation as a supplier.

The Federal Government should not hide behind the Fair Work Act, which is flawed and should not allow situations like this to develop. Along with the State Government, it should look at whether essential services or emergency powers could be applied or extended to this situation and those like it.

In the meantime, we urge the MUA to accept a wage rise in line with CPI and negotiate productivity trade-offs above that.

Yesterday’s Budget was an improvement on recent efforts but still sub-optimal in terms of tackling waste and debt.

It’s difficult to believe that we are dealing with a $22.6 billion deficit position, when we have sub 5 per cent unemployment.

It’s clear that the Government overstimulated the economy in 2009 and 2010, as evidenced by the repeated rises in interest rates by the Reserve Bank designed to head off inflationary growth.

Perhaps the real tragedy is that much of the stimulus money was wasted on bungled projects with little or no economic value, while States like Victoria are crying out for assistance with major infrastructure projects that will bust congestion, improve productivity and create real value.

It’s also disappointing that Victoria is receiving much less than its fair share of road funding, with New South Wales receiving a lot more proportionate to population and economy share.

The way to cut inflation and interest rates is to boost productivity by cutting wasteful spending, building infrastructure projects that improve efficiency, cutting red tape – especially around industrial relations – and boosting the skilled labour force through training, retraining and skilled immigration.

There are some bright spots for business, including:

• A $5,000 write-off for small business motor vehicle purchases
• A minor company tax cut for small business
• A welfare crackdown, forcing the long-term jobless back to work, although employers need to be supported in this endeavour
• The facilitation of the entry of skilled migrants into the regions.

However, we need to see more measures for small business that are significant and help drive the overall economy, particularly in sectors missing out on the resources boom.

While we welcome the workforce development measures, we need to examine these in further detail.

In terms of overall Budget strategy and execution, there’s a lot of room for improvement. We rate the budget a 5 out of 10.

Yesterday’s State Budget was responsible and safe, but there is much more to do.

Positives have focussed on honouring election promises and include:

• A Green Tick program for green businesses
• Regional highway funding; feasibility studies for rail links such as the link to Avalon Airport
• New funding to remove level crossings
• Support for regional economies via assistance to flood-affected businesses, regional tourism support and the $1 billion Regional Growth Fund
• Monies to strengthen maths and sciences in schools
• Additional police and health facilities and
• Further support for international students, new migrants and skilled migration.

The recognition of the need to rein in expenditure and debt is a big breakthrough. Victoria added more back office public servants than any other state between 2000 and 2008, a rise of 37 per cent.  This needs to be arrested and trimmed back, whether through natural attrition, hiring freezes or even voluntary redundancies.

However, we also need a medium to long term economic and infrastructure plan to build Victoria’s competitiveness.

This plan should also include tax and regulation reform options as well.

While we are disappointed in the lack of tax relief, we believe that there needs to be a plan to make Victoria more tax and red tape competitive over the parliamentary term.

For the past 20 years, Victoria has been relatively well managed economically, with business taxes around the national average. 

This must be balanced against the fact that we don’t compare as well internationally with our trading partners and competitors in the Asia-Pacific region.

There is scope for Government to act – Linfox this week said that Victoria is ‘a slugfest on costs’ in the context of refocussing much of its new business on Asia and Western Australia. 

The Government also needs to be very careful that it is not seen to be talking down the economy.

The recent VECCI Business Trends and Prospects Survey has shown business confidence plummeting – this needs turning around and we must talk the state economy up.

Victoria is a relatively successful economy in the Australian context and has a good story to tell.

Victoria has a great many natural and man-made advantages it needs to be aware of and press home.

Victoria’s skills have given it a lead as an attractive place to invest IT, advanced manufacturing and agriculture, engineering services, financial and professional services and biotechnology.

While the minerals boom is largely benefiting the outlying parts of Australia, the rising Asian middle class is likely to trigger another boom, in agriculture, where Victoria is strong.

Victoria’s strength in tourism has been acknowledged with the funding of the rail link to Avalon, initiatives to expand regional tourism and funding for flood-affected businesses.

While Victorian business appreciates the Government has its challenges, it should be noted that the Kennett Government faced a massive deficit position when it came to power, and it was able to undertake a major infrastructure program and a wholesale economic reform agenda, including tax reform.

In time, Victoria was able to overtake New South Wales and other states on a range of economic measures.

New South Wales now has a new government that is seeking to make immediate payroll tax cuts and raids on our major events.

Confidence is the key to business investment and the State Government must seek to build business confidence with a long-term agenda to boost infrastructure and reduce business costs.

We don’t have the mining growth momentum of Western Australia and Queensland and New South Wales is clearly open for business again.  We need to see the same signals from Victoria’s Government.

This article originally appeared in the Herald Sun’s Business section today.

With its first State Budget tomorrow, the new State Government has an opportunity to deliver on its election promise to provide greater support to teachers, and a performance-based pay scheme would reward the best in our state.

Although the My School website and the drafting of the National Curriculum is helping improve the transparency of Victoria’s education system, there is still a shortage of teachers adequately prepared to deliver critical subjects such as maths and science.

This problem will be exacerbated by experienced teachers retiring over the coming years.

Ensuring more teachers are recruited and trained in the subjects of maths and science will help address the demand for skilled and semi-skilled labour and will reduce the cost burden on individuals pursuing vocational qualifications.

Teaching needs to be made a more attractive career choice and to do that a performance-based pay and professional development scheme linking teaching excellence and student performance needs to be implemented. Such a scheme will reward and motivate effective teachers.

As part of our Pre-Budget submission, VECCI is also calling on the State Government to:

• Expand by 1000 the number of additional secondary teachers to be recruited with a specific focus on regional Government schools, to teach critical skill areas including literacy, maths, science and languages
• Provide 1,000 re-training scholarships over four years for existing teachers to deliver critical skill and subject areas where teacher shortages exist
• Expand career advice services to support student decision making in regard to further education, training and career transition
• Establish in partnership with industry a Youth Jobs Corp for at-risk students, which can aligned with the regional Year 12 retention program
• Establish a $10 million Research and Development Grant Fund to assist Victorian SMEs work more closely with universities to establish new opportunities for research degree students to gain essential industry experience
• Review the Australian Apprentice Completion Bonus Scheme and other State employer incentives to ensure they encourage as well as reward apprentice recruitment and retention, especially among SMEs.

VECCI’s recommendations are designed to guide the State Government in making decisions that will increase the productivity and effectiveness of Victoria’s education and training system and workforce.

Without taking these measures Victoria’s economic position risks being damaged as a result of labour shortages and an ageing workforce.

Our entire budget submission and accompanying videos can be found at www.whatbusinesswants.com.

With Victoria’s share of GST revenue set to be slashed, now more than ever the State Government must deliver a prudent State Budget next week.

In our 2011-12 State Budget submission, VECCI says while Victoria’s economy is strong, the priority of the new State Government should be to keep it this way so the state is in a position to deal with challenges such as population growth, ageing infrastructure and the capacity to respond to natural disasters.

Setting targets, through the COAG process, to reduce the cost and size of Government, will help achieve this.

All taxpayers will end up benefiting if State and Federal Governments work together to identify synergies and potential savings.

Here in Victoria, employee expenses are the largest single expense of the State Government and public service numbers increased by 37 per cent between 2000 and 2008.

Employee costs from the General Government Sector are predicted to reach $18.5 billion or 38 per cent of total expenditure by 2013-14.

This cost will become a significant impost for the State Government and will severely impact its ability to finance vital infrastructure and other projects.

The Premier has said he’d like to see States have more control over COAG’s agenda – here’s one way in which this could be realised.

The COAG process should be used for the Federal Government and State Governments to set achievable targets to reduce the cost of government, without cutting front-line service delivery staff – in important areas like law and order, education and health.

VECCI also recommends the State Government:

• Re-align growth in recurrent expenditure to be at or below growth in revenue
• Ensure all major expenditure initiatives are subject to the same cost-benefit analysis as major infrastructure and capital works
• Reduce the State’s net financial liabilities to 10 per cent of Gross State Product by 30 June 2014
• Maintain an average infrastructure replacement ratio for the State of 2.5:1 or greater
• Ensure average annual increases in General Government Sector Employee costs are not greater than the Victorian public sector wage growth index
• Establish new measures of State competitiveness that include assessments of the quality and quantity of the Government’s economic impact, particularly in respect of its interface with the private sector.

VECCI calls on the new State Government to get on the front foot and ensure Victoria’s finances are strong enough to respond to fluctuating financial markets, changing economic conditions, the need for business tax relief, population growth, higher demand for services and the state’s capacity to respond to natural disasters.

All the details of our State Budget submission, with accompanying videos, are available at whatbusinesswants.com

When Jeff Kennett took the reins of power in 1992 he uncovered some disturbing facts, including a budget blowout.  Victoria’s State Budget was over $2 billion in deficit and the state had accrued more than $30 billion in debt.

The new Victorian Government argues that it is facing some black holes of its own. While the final figures will only be revealed in the state budget in a few months time, Ministers are claiming to have uncovered budget “black holes” and unfunded programs across multiple portfolios.

We do know, however, that the last budget handed down by the former government was more than $800 million in surplus, and that we are on track for a similar surplus this year.

While the State is clearly not broke, the existence of these black holes is being used as justification for a tough budget and a halt to the previous Government’s ambitious infrastructure agenda.

The public has been told to expect little tax relief, and some major infrastructure projects, including those in the Transport Plan, look like they may not go ahead or will be delayed for some time.

Already, a study of the traffic problems on Hoddle Street has been shelved. A cost blowout and reduced federal funding for the regional rail link through the western suburbs of Melbourne will cause that project to be delayed somewhat. 

The fate of other important projects, such as the proposed underground Metro between Footscray and Caulfield, are as yet unknown.

The Federal Government, encountering a few black holes of its own making, has pulled the rug on a number of projects, including the Regional Rail Link, and its Commonwealth Grants Commission has also given Victoria a $2.5 billion haircut.

Building while repairing

However, it is worth remembering that budget problems did not stop the Kennett Government commencing many vital infrastructure projects that benefit the people of Victoria today.

In the early days of the Kennett Government, a raft of major infrastructure developments were proposed, planned or started construction. These included CityLink, Melbourne Exhibition Centre, Federation Square, the new Melbourne Museum, the development of Docklands and Southbank and scores of important freeway upgrades across the state.

All this was achieved whilst paying back billions of government debt and tackling the fallout from the failures of the State Bank and Victorian Economic Development Corporation.

The Kennett Government understood that a quick injection of confidence in the Victorian economy would boost economic growth and, in turn, Government coffers.

Continued infrastructure development is just as important today.

This is particularly the case when you consider Victoria’s current and expected population growth rates.

Building to grow

In 2010, for the first time in decades, Victoria was pronounced the fastest growing state in Australia, buoyed by strong international migration. Melbourne’s population has been growing by around 100,000 people each year, and is expected to double in size to 7 million people by 2050.

Whilst this is fantastic for Victoria’s economy, it does pose challenges.

Investment in infrastructure must keep pace with population growth, otherwise our roads and rail networks will not be able to cope with the increased demands placed on them. The cautionary tale posed by a decade of under-investment in infrastructure in New South Wales should serve as a stark warning to Victorian policymakers. Melbourne’s status as one of the most livable cities in the world would surely be undermined by a Sydney-style chaotic and dysfunctional road and public transport network.

Meanwhile, we now face competition from a reinvigorated New South Wales, whose new Government has already announced plans for a new Convention Centre and set a program of reform and prioritised development.

As part of our state budget recommendations, VECCI has encouraged the Baillieu Government to prioritise some key infrastructure projects for Victoria’s future.

Infrastructure proposals

To ensure Victoria continues to be able to host major events and conventions, the Melbourne Exhibition Centre should be extended (the business case is compelling). An East-West road and public transport link would go a long way to alleviating productivity-sapping congestion. Dealing with the worst level-crossings that clog our busiest roads would also help. A regional superhighway between Geelong, Ballarat, Bendigo and Shepparton will boost regional growth. Commitment and planning for these projects will send a positive confidence message to business and the community.

Victoria also needs a holistic approach to infrastructure development. An integrated state-wide infrastructure plan will help ensure investment is directed towards the most pressing and productive projects. Planning and regulatory agencies need to be coordinated to support development, rather than hamper it.

Private and alternative investment means also needs to be encouraged.  NSW will be issuing Government-backed Waratah bonds. Canadian states like Ontario have now surpassed Victoria in terms of the level of Public-Private Partnership activity. Ontario already has 52 PPP projects under procurement consideration with its $17.5 billion Move Ontario 20/20 transport program.  There are 22 PPPs under construction in Ontario as opposed to 6 in Victoria.

It is true that investing in infrastructure is not cheap or easy. But can we really afford not to?

This article was originally published in The Age on Friday 15 April.

VECCI is calling for Victoria’s regional areas to have greater support from the new State Government in its first State Budget.

The regions’ economic output has almost tripled in ten years and regions now enjoy improved liveability and business competitiveness.

While the economic performance of Victoria’s regional and rural communities has been a standout feature of the State’s overall economic growth, we need to build on this momentum.

Regional areas will have an important part to play in helping to ease Victoria’s projected population growth but they need assistance to adapt.

Regional export businesses in particular are experiencing tough times with flooding and a high Australian dollar.

With its first Budget, the new State Government needs to articulate how it will attract and retain youth in the regions as well as provide improved transport, accommodation, social and recreational options.

Our regions also possess fantastic natural assets that mean industries such as tourism can excel with the right policies and programs provided by the State Government.

In order to set new directions for sustainable regional prosperity, VECCI is calling on the State Government to:

• Develop a Regional Victoria Investment Development Profile that highlights the top 10 ‘investment ready’ infrastructure projects
• Support the implementation of National Icon Infrastructure Projects in regional Victoria as identified by Parks Victoria and enhance the promotion of regional Victoria as a destination rich in nature-based experiences
• Review rural council funding arrangements and options to improve infrastructure and service delivery
• Increase region-to-region and region-Melbourne connectivity (including a regional superhighway)
• Fast track the implementation of complementary infrastructure to support regional growth, for example public transport, health, education and accommodation
• Recruit an additional 1,000 secondary teachers in regional Government schools trained to teach critical skills areas including literacy, maths, science and language
• Set a 10 per cent aspiration target for regional VCE enrolments in a language other than English by 2015
• Provide increased marketing support for priority regional business events.

The State Government must tackle these issues to help regional Victoria address the challenges ahead.