State Government assistance programs need full evaluation

Wednesday 18 June, 2014 | Tags: QCA, competition, industry assistance;

The Chamber of Commerce & Industry Queensland (CCIQ) has called on the Queensland Competition Authority (QCA) to undertake a thorough evaluation of industry assistance programs.

CCIQ has urged the QCA to put a specific focus of its inquiry into Queensland Government industry assistance on discretionary grant funding and financial incentives that “lack transparency”.

In a CCIQ submission, General Manager of Advocacy Nick Behrens said a disciplined spending approach is needed on government assistance measures that better support Queensland’s emerging and transitioning industries. 

“The ad-hoc funding to selective organisations must be converted to more transparent assistance measures with positive, widespread impacts,” Mr Behrens said.

“Given the state’s budgetary pressures, it is vital that any industry assistance measure represent value for money.

“This requires changing the design and delivery of various industry assistance programs to realise savings and maximise benefits.”

Mr Behrens said government assistance should be broad-based, rather than backing particular sectors, and market-driven to encourage the private sector to make decisions about investment.    

“Assistance that is offered in the form of tax and duty exemption thresholds adds value to Queensland’s competitiveness because it stimulates small businesses activity across all sectors and all regions of the state,” he said.

“These forms of assistance have clear advantages over discretionary grant programs, which are less transparent and involve complex administrative arrangements.

“Currently, there are a large number of grant programs and assistance measures that are costly and lack coordination and transparency.”

CCIQ believes the effectiveness of government assistance can be improved by consolidating grant programs to reduce administrative costs and simplifying grant application processes to ensure optimal take-up by those eligible.

“A proper assessment of the various financial incentives provided to major projects and to major businesses for relocating to Queensland will help identify high cost initiatives in need of reform,” Mr Behrens said. 

“Our experience is these tax holidays lack the transparency that the public expects and a set of defined outcomes to judge their effectiveness under an accountable framework.

“Any savings realised can then be redirected towards driving down business operating costs through lower taxes, improved labour market flexibility and less red tape for all businesses.”

Mr Behrens also called for ongoing, independent assessment of industry assistance, with key performance indicators and appropriate benchmarking across different programs and between states to guide continuous improvement. 

“Ideally, we would like to see a best practice approach established for industry assistance, similar to what is provided via the Office of Best Practice Regulation,” he said.

“This will help ensure government assistance measures continue to add value to the state’s economic performance and also remain affordable.”

The QCA’s interim report is scheduled for release by the end of August 2014.

 

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