02/03/2016
“We, like BHP, Woodside, everybody in our sector have been hit with sharp drops in revenue — the largest cut in revenue any government has experienced in Australia since the Great Depression,” he said.
Discussing asset sales and revenue raising, Dr Nahan said the Government is considering selling Western Power, WA’s electricity provider.
“It has been the major source of borrowings from the state, it is a regulated monopoly,” he said.
Dr Nahan said the State has almost no control over its Western Power asset in terms of investment, returns and electricity prices.
Furthermore, Western Power is under technological change, Dr Nahan said.
“I think there is a great future under poles and wires because you are going to have more electrons transferred not less,” he said.
“But it’s going to require policy and innovativeness beyond what the public sector can actually provide.”
On the privatisation of Watercorp, Dr Nahan said it is unlikely to be sold in the first round of asset sales.
“Watercorp is difficult in the sense that it is an integrated monopoly, but deals with a scarce resource that has to be socially managed,” he said.
Also speaking at the event , The Australian Contributing Editor and Sky News PVO News Day Anchor, Dr Peter van Onselen said the Turnbull Government will be re-elected.
“I see Malcolm Turnbull winning this election year… but I don’t see him doing it with the kind of policy mandate that looked like it would be the case last year,” he said.
“I see it very much as a pyrrhic victory for the Coalition emulating the Fraser years as we all hang on and wait for our next Bob Hawke, Paul Keating or John Howard.”
Dr van Onselen said it will be interesting to see what policy direction the Government chooses.
“The early signs for the election year is that the Opposition not the Government is going to make the big run on policy,” he said.
“With GST off the table the Government is really hampered in how it can change the tax mix.”
On tax, Business Council of Australia Chief Economist, Lisa Gropp said reform should be about reducing tax burdens.
“Tax reform can’t be about increasing tax rates because it relies too heavily on taxes that will increase the burden,” she said.
“Australia’s tax system is inefficient because it relies too heavily on taxes that discourage highly productive activities.”
Ms Gropp said increasing productivity is vital for the economy and that “there is no single policy lever” that can be pulled to do this.
On economic issues, Ms Gropp said the most immediate challenge is the terms of trade.
“The only durable strategy is for us to build an economy, one that’s agile…it’s flexible, it’s innovative enough to be able to respond to shocks positive or negative,” she said.
Macquarie Group WA Chairman, Mark Barnaba said the biggest global issue is deflation.
“The biggest issue faced at the moment is deflation, an issue we haven’t had to grapple with the last 20-30 years around the world,” he said.
The global economy has slowed but there is still growth, he said.
“Whilst China has clearly slowed down…it is still doing well on a global scale,” he said.
“The US is really going against most of the world quite frankly.”
“It is looking to increase rates and has a monetary and fiscal policy that is slightly at odds with the cycle of the rest of the world, but we need it.”
Discussing WA, Mr Barnaba said its share of GDP is lower than the Australian average but it is not in a recession.
“I think we are probably at the low point in terms of how we are doing as a state. I think there’s more reason to be optimistic going forward than not,” he said.
Also speaking at the event, Perth Airport CEO, Brad Geatches said the next wave of investment involves moving Qantas domestic to the international terminal and consolidating the airport into one terminal.
On the airport rail link, Mr Geatches said they have reached an agreement on terms with the State Government for the rail project.
“Rail must come to capital city airports at some time in their life,” he said.
The rail link is timely because it allows the airport to integrate it into the new single terminal development, he said.
Telstra Group Corporate Affairs Managing Director, Dr Tony Warren discussed innovation and disruption in the telecommunications industry at the event.
“We’re seeing competition really come increasingly from the Snapchats, the Apple messengers of the world rather than the traditional telco competitors,” he said.
Mr Warren said it is important that we fit technological change into existing business and sector strengths. For example driverless cars already exist in the mining industry in Australia.
On collaboration with universities, Mr Warren said Australia must reshape the relationship with the universities.
“I think it is fair to say Australia has been pretty appalling in the relationship between the business community and the educational and research communities with some notable exceptions,” he said.
UnitingCare West CEO, Sue Ash AO also discussed technology and disruption at the event.
“We’re going to need to ensure that the ICT connection for people who are living without sufficient resources is actually maintained otherwise they will be totally excluded,” she said
“Australia has more than 60 per cent of population doing very well or reasonably well but changing work patterns may change that quickly depending on global economic factors and national policy responses.”
On WA, she said the state needs 60 per cent of population doing well financially if it is going to rebalance in the mining downturn.