Posted: 11 June 2024


Cost of doing business crisis 

The Townsville Chamber of Commerce CEO Heidi Turner, today acknowledged that the budget focus on the cost of living crisis but emphasised the immediate need to address the cost of doing business crisis.

Turner called for long-term strategies to address the financial pressures faced by businesses and highlighted several critical issues impacting the business community in North Queensland.

"We need a long-term strategy to ease daily financial pressures. Businesses need equitable costs and the ability to plan and invest for the future. Subsidies and grants don’t provide that certainty or boost business confidence,” said Turner.

Turner pointed out the double taxation burden on businesses. "Currently, we are paying tax on a tax and the state is double dipping with stamp duty with most of the GST reallocated to state coffers due to horizontal fiscal equalisation. When GST was introduced in 2000, the intention was that stamp duty would be abolished, but it is still applied,”

Highlighting the significant impact of insurance costs and taxation especially for Northern Queenslanders she added, "Insurance is one of the highest costs for business and premiums continue to increase, we pay 19% in tax on top of our premiums. But insurance is an essential service—we have to have it for loans, mortgages, and to do business, so why are we taxed on it at all.

“In the north of Queensland we have higher premiums so this means we also pay significantly more in tax on those high premiums than in the South East.  Removing stamp duty is an immediate lever that can be pulled by the state government, reducing premiums by 9% for all Queenslanders."

Turner also addressed the recent budget allocation for disaster resilience and mitigation, explaining why it won't effectively reduce insurance premiums. "The $100 million in the budget for disaster resilience and mitigation will not reduce the cost of insurance premiums as insurers don’t drill down to individual property risk,”

"The cost-of-living crisis has had a dual impact on businesses increase in operational costs and a decrease in income.  Some of our members have seen a 30% increase in energy costs over the last 12 months. This, combined with the highest wages in history and increasing insurance premiums, is creating immense pressure. These issues are further compounded by low productivity and decreased consumer spending.”

Turner warned of the broader economic consequences if these issues are not addressed. "Business owners cannot absorb these escalating costs indefinitely. This will inevitably lead to further increases in costs for consumers, and continued growth in the number of insolvencies which are already at a decade high across the country.”