NSW election a likely ALP win… Oz tourists prefer OS… Bank’s franchise wrangles… China growth is long-term… Vic business given water warning… More switch to federal compo…

On the eve of the NSW election, ALP victory looks likely

The state’s stalled economy and protection for small business from anti-competitive conduct are the big issues for tomorrow’s NSW state election, according to business representative groups.

Polls have consistently predicted the return of Morris Iemma’s Labor Government tomorrow. In a final testament to a campaign widely considered to have struggled, NSW Coalition leader Peter Debnam yesterday announced his election promises cost $9.8 billion, massively above Labor’s $1.6 billion total.

Here’s what the groups are saying:

Property Council of Australia (NSW) executive director Ken Morrison

“We want to see an economic stimulus, the economy is struggling and needs short-term stimulus and long-term policy measures.

“The Coalition has a modest stimulus package, which is better than nothing, the Government has nothing on the table in that regard and neither party has engaged on the crucial issues of longer term transport planning.”

NSW Business Chamber spokesman Paul Ritchie

“The standout issue is really the economic plan of both sides going forward. NSW has been underperforming in recent years and we really have to work harder to improve its performance.

“We’ve applauded the Government’s record in cutting workers compensation costs and undertaking substantive changes to red tape and seeking to improve the business climate. At the same time the opposition has put forward very strong policies regarding OHS, red tape, payroll tax cuts and skills.”

Motor Traders Association (NSW) executive director James McCall

“The biggest issue with our members is their relationship with big businesses, not IR or anything else. We can see what supermarkets do to primary producers, what oil companies are doing to independent service stations proprietors, the car manufacturers’ treatment of dealers. They’re using market power to squeeze small business.

“I don’t think either major party has a policy on it, both of them are abysmal – a number of the independents we’ve spoken to are much more supportive of small business.”

– Mike Preston

Domestic travel down, but more overseas flights

Australians are taking 15% fewer domestic holidays than they were five years ago, according to a Tourism Australia report released yesterday.

Australians think domestic holidays are bad value for money and don’t have many attractions compared to overseas destinations, according to the report Changing Consumer Behaviour: Impact on the Australian Domestic Tourism Market.

But in good news for Australian tourism businesses, the Federal Government will allow middle eastern airlines Emirates and Etihad Airways to double their flights into Australia in coming years. The change will eventually mean an extra 56 flights a week into Australia, with the bulk going through Brisbane and Melbourne airports.

– Mike Preston

Bank of Queensland franchise dispute

Bendigo Bank franchisees will be watching closely the unfolding litigation between Bank of Queensland and one of its franchisees. As the Bendigo Bank board considers the merger offer from Bank of Queensland to Bendigo Bank shareholders of 0.748 of its own shares and $5.50 in cash for each Bendigo share, BoQ is in the Federal Court defending itself against allegations of deceptive conduct by a disgruntled franchisee.

Leicester Ramsey, the former owner of BoQ’s Campbelltown branch, has alleged BoQ made false and misleading statements that resulted in him borrowing $697,000 from the bank to pay for a franchise fee and associated working capital and fit-out costs, reports The Australian. He failed to make expected returns and alleges that in the seven months to March 2006, only 33 BoQ branches in NSW and the ACT were lending enough to break even.

The case follows similar allegations by the former owners of BoQ’s Castlereagh Street Sydney branch in the Industrial Relations Court.

BoQ has previously said it is confident of successfully defending the Cambelltown case and that disputes are a normal part of operating a franchising business.

Such a remark may cause alarm to Bendigo Community Bank franchisees. If the merger goes ahead, the Bendigo Community Bank franchisees are likely to be answering to a new management.

– Jacqui Walker

China: 15 years growth ahead

China’s strong sustained economic growth should continue for the next 15 years, says the director of the World Bank’s director of development policy, David Dollar.

Asia’s hunger for resources would remain robust although the basis for growth was shifting from the manufacturing to the services sector, reports The Australian Financial Review today.

Dollar says there were no net job increases in China manufacturing, while the services sector including transport and construction were expanding sharply. Nevertheless China has a host of social and economic problems including air and water pollution, environmental degradation, and increasing inequity between the haves and the have-nots.

– Amanda Gome

Victorian business told to save water

The Victorian Government has told 1500 of the state’s biggest water-using businesses to prepare to submit water savings plans. The announcement comes after tougher water restrictions were announced for Victorian householders yesterday. Industry uses about 10% of the state’s water; agriculture about 70%, and residents about 8%.

– Mike Preston

ANZ ponders switch to federal workers comp

ANZ Bank is considering transferring workers compensation coverage for its 20,000 employees from state systems to the Federal Comcare scheme, The Australian Financial Review reports today.

An exodus of big businesses from state WorkCover schemes could leave SMEs with higher premiums, state governments say.

– Mike Preston

IT news: Google ad trial

Google is trialling a new way of charging for Google ads – if advertisers don’t get a result, they don’t have to pay. The New York Times reports Google is extending a test of a system that allowed advertisers to pay only when an ad caused a consumer to buy a product, sign up for a newsletter or a quote.

Most Google advertisers now pay per click on their ad or view of their site, regardless of sales that result. The new way of charging would greatly reduce advertisers’ risks because they are not charged for ineffective ads. It’s a similar model to that used by marketing company ValueClick, search engine start-up Snap, and Turn, a network that matches advertisers and publishers interested in cost-per-action ads.

– Jacqui Walker

Economic round-up

The Australian dollar is trading at US80.67 cents at 11.15am. The already-strong dollar was given a further boost when the US Federal Reserve indicated it was less likely to raise interest rates in future, in its statement accompanying the decision not to raise rates yesterday.

The S&P/ASX 200 is holding steady this morning, lifting just 0.4% from yesterday’s 5955.7 close.