Competition among states is good-Newman

State governments should be able to lower taxes or cut regulation to attract business investment, Queensland Premier Campbell Newman says.

On his first trip to Canberra as newly elected Queensland premier, Mr Newman said state governments should be able to lower taxes or cut regulation to attract business investment.

He was commenting on a federal government plan to cut red tape and unnecessary regulations.

‘It sounds very seductive to say we’re going to have harmonisation of regulations,’ Mr Newman told ABC Radio on Friday.

‘But the way that funds are distributed around the states these days, you’re positively penalised if you actually want to have a lower payroll tax.’

Mr Newman shortly will join other state premiers and territory chief ministers for the Council of Australian Governments (COAG) meeting.

The federal government’s bid to address skills shortages will be high on the agenda.

Labor has put an extra $1.75 billion on the table for the states in a bid to overcome skill shortages.

In return, states will have to adopt reforms such as the harmonisation of courses across Australia.

A proposal to give state and territory governments a bigger say in environmental approvals to fast-track major projects will also be a focus.

The reform was the key outcome of the inaugural meeting of the COAG Business Advisory Forum, which brought together the prime minister, business chiefs and premiers.

The business forum proposal would slash the ‘green tape’ by negotiating new federal-state arrangements and national standards.

NSW Premier Barry O’Farrell is looking forward to a change in the political numbers around the COAG table on Friday.

The four largest states – NSW, Victoria, Queensland and Western Australia – have non-Labor governments.

‘One of the consequences is that rather than Labor using the numbers to push through motherhood statements, we actually focus on delivering real results,’ he told reporters on his way into Parliament House.

Mr O’Farrell agreed the states should be competitive against each other instead of having a one-size-fits-all approach across the country.

‘It should always be left to the states to set the rate of individual taxes,’ he said, adding it was good for business because it offered them a range of options.

Northern Territory Chief Minister Paul Henderson dismissed Mr Newman’s approach, saying the Queensland premier was trying to make a name for himself.

ACT Chief Minister Katy Gallagher will use the COAG meeting to reveal plans to partner with neighbouring NSW councils to boost collective buying power.

She will present a case study in trans-border co-operation, telling other leaders that Canberra’s role as a regional centre increasingly will be a priority for the territory.

West Australia Premier Colin Barnett will argue for a change to GST sharing arrangements, saying the current system is grossly unfair and broken.

‘Unless that is corrected then the rate of economic expansion in Western Australia will slow and the rate of growth of the Australian economy will slow,’ he told reporters.

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