State could use a review process for special deals

Ian Henke (28/7) points to the costly mistakes made by a previous Victorian Government in the power deal struck with Alcoa.

I do not wish to enter the debate about what, if anything, should be done about this now.

However, it does seem pertinent to point out that this is only one of many costly mistakes made in the past by a state government in providing assistance of one form or another in order to induce enterprises to invest in this state.  It may also be appropriate to point out that the present Victorian Government, along with other state governments, is still in the business of providing such incentives.

While the scope for making costly mistakes may now be less than it was in the 1980s, there remains considerable public unease when governments do special "deals" with business enterprises.

It would help relieve such unease if, before such "deals" were consummated, the costs and benefits were evaluated by an independent body.

There is now a long record of federal bodies such as the Industries Commission, Foreign Investment Review Board and Trade Practices Commission examining commercial-in-confidence material, evaluating it and providing advice to the Commonwealth Government.

Even though some of that advice is itself provided in confidence, the processes undertaken reduce the mistake risk and improve transparency.

One option for the State Government would be for it to establish its own industry commission to evaluate the costs and benefits of providing incentives where special deals are proposed, and to report to the Government.  In the long run this approach could produce political as well as economic benefits.

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