Approaching state elections

ballot, vote, electionIn the lead up to Victoria’s November election, the ARA feels it’s worth retailers considering the impact of state government decisions and actions on their businesses and consumers.

The Victorian, New South Wales and Queensland Governments are also due to go to the polls in March next year. Given the populations and respective sizes of the economies in these three states, the rest of the country will be impacted by the results due to electoral outcomes. While it is not wise for business groups to play politics, it is wise for business to back pro-business decisions and policies.


Of the three states, the most interesting contest is likely to be in Victoria. There are few who would dispute that the current state government hasn’t done a good job at financial management but this has been the only state government to consistently return a budget surplus in recent years. From the pro-business perspective we have seen some cuts in payroll tax thresholds, work cover premiums and cuts in red tape. The disappointment has been around the government selling its message and a vision for Victoria with infrastructure commitments only being clearly enunciated in recent times. One of the key reasons why this election will be close is that both sides of politics have generally tried to be supportive of business since the Kennett era placing jobs and growing Victoria above ideology.

New South Wales

The New South Wales election should be another whitewash despite recent corruption investigations. The truth remains that the previous government was so corrupt and incompetent the voters of New South Wales will ask who was worse – the ones who corruptly dodged the fundraising rules or those who were lining their own pockets? As a good friend said to me, “there is one thing you must remember about New South Wales – nothing has changed since the rum rebellion.” The reality is that New South Wales (particularly Sydney) has become the economic driver for the rest of the country with a mixture of much-needed infrastructure spending, a construction boom and services investment driving the economy and jobs. We have also seen, like Victoria, some cuts in red tape and improvements in the payroll tax threshold resulting in a minor boom which has lead to predictions of a budget surplus. There is still much to be done around planning reform, bureaucracy, further tax cuts, infrastructure, gas and energy prices. While I will stick to my statement about not playing politics it is difficult to see any other result than the current government being returned, despite the incompetency around political fundraising corruption.


Lastly, but certainly not least, is Queensland. Like New South Wales, this result should be an obvious given both had record results at the last state elections. However, there have been a number of storms which make a clear result a little more uncertain. The twin economic storms are the drop in the growth of mining and the rampant debt crisis which has hamstrung the Queensland Government. While mining has remained a key driver its effects have been tempered by massive cost cutting by the state government which has left little room for stimulus. There is also the not-unusual unique political situation in Queensland.

In all good faith, very few could believe the remnants of the previous government have the depth in manpower to put up a credible alternative with such small numbers currently in Parliament. However, all Labor has to do is keep in striking distance and see what effects other political forces might have at the state election. I don’t think there is any doubt around the Queensland Government having the largest number of members after the next state election.

The difficulty is going to be around the government having a majority if Clive Palmer and other disparate forces gain enough seats. There is also the question around whether Premier Newman will retain his seat having seen recent polling and his refusal to move to a safer seat. Queensland is probably facing the greatest risk in needing a government which has the ability to deal with what is a genuine debt crisis and encourage development and growth.

The ARA believes that state and local governments have significant impacts on retailers. State government need to streamline local government to minimise bureaucratic intervention on business, reduce planning costs and delays through simplified harmonised planning schemes, reduce taxes where possible including the removal of taxes through GST reform, reduce work health and safety compliance costs, invest in infrastructure and lower energy costs through market investment and reform. If state governments keep to some simple principles we will all be better off.



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