The New South Wales Opposition will consider a cut in payroll tax if it wins government in the upcoming election, according to statements made yesterday by coalition treasury spokesman Mike Baird in a debate against treasurer Eric Roozendaal.
Baird indicated yesterday that not only would the Opposition fulfil its pledge of delivering payroll tax rebates to businesses, that it would also consider cutting the current payroll tax rate of 5.45%.
“Businesses in this state are penalised for operating in our boundaries,” Baird said. “Payroll tax is a rate that we will look at it.”
“Every budget… is an opportunity to make New South Wales more competitive.”
However, Roozendaal countered that point by saying only 10% of businesses in New South Wales paid tax for having wages above the $658,000 threshold.
“A business in Victoria with a $1.5 million payroll pays more in payroll tax than they would if they operated in New South Wales… this is a classic furphy of the opposition. Payroll tax in New South Wales is at its lowest in 20 years.”
The current payroll tax rate in New South Wales is set at 5.45%, having dropped from 5.5% from July 1 due to changes introduced by the Government. But this level is higher than Victoria and Queensland, which pay rates of 4.9% and 4.75% respectively.
The promise to consider cutting the payroll tax rate even further comes after former Victorian premier John Brumby said he would cut the tax by 0.05% if Labor won the election – it ultimately lost to Labor.
Council of Small Business of Australia chief executive Peter Strong says the consideration is welcome but businesses want to see action taken, and not empty promises.
“A lot of people say they’ll look at things, but don’t do anything about it. Just get rid of it. We want a promise that will be followed.”
“This is has been an issue for businesses forever. Big business, small, everybody. If they just cut it, it’s fantastic. It’ll end up having more of an impact for medium businesses rather than small, but we welcome any downward change in the payroll tax rate.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
