The Premier of New South Wales, Nathan Rees, has rejected calls to temporarily cut payroll tax to protect jobs in the state, claiming the idea is irresponsible.
State Opposition leader Barry O’Farrell wants to see an one-off payroll cut tax cut by 15% to 4.89% to help relieve the pressure on business and save jobs.
“The tax cut would keep almost $1 billion in NSW businesses – the equivalent of a payroll for almost 16,500 jobs. This measure would give business owners the ability to protect jobs during the downturn,” O’Farrell wrote in an opinion piece explaining the proposal.
“A one-off reduction in payroll tax, in the face of extraordinary global economic conditions and dire forecasts about jobs, would be a practical way for government to help business and families.”
NSW Business Chamber has welcomed the plan, but also wants to see more spending on infrastructure.
“Further cuts to payroll tax would be a good start, but we’re calling on both sides of politics to consider a wider package of concrete measures to kick-start the NSW economy,” the chamber chief executive Kevin MacDonald said in a statement. .
But Rees has slammed the proposal and accused O’Farrell of political grand-standing.
“It doesn’t stack up and it guarantees a structural deficit for the state of New South Wales.”
“If he thinks he can get away with this sort of back-of-envelope policy, if he thinks he can get away with it, for a little while, he will.
“But eventually people will wake up to this and recognise it for the populism that it is.”
Meanwhile, the Australian Chamber of Commerce and Industry has suggested that the Federal Government to allow small businesses to offset losses made this year against tax paid on profits in previous years.
The result of the system – which is in place in the United States and Britain – would mean loss-making SMEs effectively receive an immediate tax refund.
“This would increase cash flow in the small and medium sector,” ACCI chief executive Peter Anderson told The Australian.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
