Premier Morris Iemma’s Economic & Financial Statement

The Premier’s Economic and Financial Statement

Response to the Audit of NSW Government Expenditure and Assets Report

Premier Morris Iemma today released an Economic and Financial Statement in response to the Audit of NSW Government Expenditure and Assets.

The Audit revealed that the finances of NSW are sound. However, with the rate of expenditure growth at roughly 1% higher than revenues, corrective measures need to be taken.

The Government’s objectives, encapsulated in this Economic and Financial Statement, are to improve the efficiency of government with a greater emphasis on frontline services, and to encourage the development of business in NSW largely through building closer and more productive relationships with business.

Public Sector Reform

In his statement today, Premier Iemma announced a series of reforms to the public sector in order to improve its efficiency and achieve a saving of $2.5 billion over four years.

The reforms are focused on redirecting resources from backofhouse operations to priority frontline services and reducing duplication within and between government departments. The package includes the following measures:

  • 5000 jobs will be cut from the NSW public service over two years. These will be predominately voluntary redundancies
  • The number of budget dependent government agencies will be reduced by 14. In most cases this will occur through the amalgamation of agencies. The most notable of these will be a revamped Department of State and Regional Development with additional responsibilities, and a new Department of the Arts, Sport and Recreation which brings together a number of related agencies
  • A Service Delivery Unit will be created, comprising public and private sector expertise, and will work closely with agencies to achieve improvements and greater efficiency in frontline services
  • Public sector employee costs will be reduced through maintaining real wages, imposing a four week cap for Senior Executive Service staff on the unattached list, consolidate appeals procedures, reducing workers compensation costs, improved management of overtime and leave payments, and improved efficiency in corporate services.

Business Development

Premier Iemma’s Financial and Economic Statement released today indicates a new focus on engaging closely with business in order to encourage investment, increase jobs and drive economic growth in NSW.

The main characteristics of the Government’s approach are:

  • providing the fundamentals such as education and training, efficient infrastructure, and appropriate levels of taxation and regulation,
  • an openness to trade and investment,
  • supporting new industries,
  • and supporting small business through the creation of a positive environment.

The following initiatives and reforms, designed to support business in NSW, were announced:

The Premier’s Business Roundtable

The Premier’s Business Roundtable will be comprised of leading members of the NSW business community and chaired by Mr Iemma. Its purpose is to foster closer ties between the Government and the private sector and to advise the Premier directly on issues facing business and industry.
The Roundtable will consist of a core group of 1215 NSW business executives appointed by the Premier from a range of industry sectors. Members will meet every three months and will incorporate standing forums of specific issues with an emphasis on practical measures.

An enhanced Department of State and Regional Development

The Department of State and Regional Development will receive a $13 million budget enhancement, signalling a more aggressive approach to encouraging business and investment in NSW.

The Department’s responsibilities will also be increased. In addition to its current functions, it will assume responsibility for:

  • the Tourism Industry Division currently within the Department of Tourism, Sport and Recreation
  • the functions of the Ministry for Science and Medical Research
  • individual overseas project operations of various agencies
  • and, by mid 2006, it is intended that the part of the Film and Television Office responsible for attracting investment to NSW be transferred to the Department.

The revamped Department of State and Regional Development will build a greater partnership with Austrade and utilise their worldwide networks, rather than duplicating them, and will focus on emerging markets in China and India.

This new approach to business will also include tailored packages of assistance in order to facilitate investment, encourage exports and support small and medium enterprises.

A $90 million payroll tax incentive

This payroll tax rebate will apply to new or expanding businesses in areas of NSW with persistently above average unemployment. Eligible businesses will receive a rebate on their payroll tax of 100% for three years, then 66% in their fourth year and 33 % in their fifth. This incentive is designed to create jobs in priority areas and encourage the expansion of existing businesses.

Major reforms to the state’s planning system

These reforms are designed to streamline the state’s planning process and reduce red tape for major developments. This signals a progressive transformation from a process driven approach to an outcomes focused service.

The reforms include the provision for the Minister for Planning to intervene in development applications handled at a local government level in cases of unsatisfactory performance and long delays. In such cases, the Minister will appoint a Planning Assessment Panel to exercise the planning functions of the council.

In addition, the Minister for Planning will establish a task force to identify and appropriately zone employment lands throughout the State, but particularly in the Sydney basin.

$10 million Science leveraging fund

A specific fund for science investment will be established to assist NSW research institutions attract Commonwealth funding for Research and Development programs.

Property Authority

A Property Authority will be established as of 1 July 2006 with the task of extracting better value from land and buildings held by the Government. It will firstly conduct an audit of Government property and then be responsible for the management of these assets so as to better utilise them and achieve savings.

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