National plan needed to cut payroll tax: ACCI

State and federal governments should develop a national plan to phase out payroll tax across the country, Australian Chamber of Commerce and Industry chief executive Peter Anderson says.

State and federal governments should develop a national plan to phase out payroll tax across the country, Australian Chamber of Commerce and Industry chief executive Peter Anderson says.

The harmonisation of definitions in the various state payroll tax regimes will be discussed tomorrow’s Council of Australian Governments meeting in Sydney, but Anderson says deep payroll tax cuts should also be on the COAG agenda.

“Harmonisation of definitions is fine but it doesn’t deal with the fundamental problem of states levying a tax on jobs,” Anderson says. “Payroll tax is still levied by the states despite receiving large GST revenues, and the states and the Commonwealth need to adopt a plan for the phasing out of payroll tax based on the increased GST revenues they now receive.”

Red-tape reform has become a focus of COAG under Labor, with Finance Minister Lindsay Tanner and Small Business Minister Craig Emerson leading efforts to implement nationally consistent regulations in more than 30 areas, ranging from trade skill licensing to building codes.

But perhaps the biggest and most controversial task taken on by COAG is reform and harmonisation of the various state occupational health and safety regimes. The NSW Government is holding out for aspects of its OH&S laws, widely considered by business to be the harshest and least effective regime in the country, to be retained in the national scheme.

COAG needs to be careful to ensure it doesn’t blindly pursue change without considering the impact of any changes on business, Anderson says.

“There is progress being made in areas where there is less contention, but the real reform agenda is in areas where one party has to give some ground. That requires strong political leadership. COAG has put some building blocks in place in its past two meetings in areas like OH&S reform but it needs a focus on the quality of reform as well as the pace,” Anderson says.

It was announced today that COAG has agreed to the creation of a national electronic system for property conveyancing, to take effect in March 2010. The change is expected to result in compliance savings in the order of $250 million.

Read more on COAG, red tape, payroll tax and occupational health and safety

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