NSW: Govt urged to slash payroll tax

AAP General News (Australia)
12-03-2006
NSW: Govt urged to slash payroll tax

By Belinda Tasker

SYDNEY, Dec 3 AAP - NSW's biggest business lobby group is urging the state government
to slash payroll taxes and back a national carbon trading scheme ahead of next year's
budget.

Australian Business Limited (ABL)/State Chamber said the government should cut payroll
tax over a four year period to bring it into line with Queensland and Victoria.

Currently, payroll tax stands at 6.0 per cent in NSW compared to 4.75 per cent in Queensland
and 5.15 per cent in Victoria.

In its pre-budget submission, ABL argued that with low economic growth in NSW, rising
unemployment levels, the drought and higher interest rates, the government was relying
too heavily on payroll tax to boost its budget bottom line.

"In this environment it is difficult to explain why NSW persists with the highest payroll
tax rate in Australia and why Treasury seeks to increase payroll tax revenues by a total
of 23 per cent over the coming budgetary cycle," it said.

"Payroll tax in its current form distorts decision making, with NSW having the greatest
reliance on payroll tax of any state or territory government in Australia."

The ABL said the government's announcement in February of a $90 million payroll tax
concession for businesses in areas with above average unemployment, should be expanded
to include all businesses in drought affected areas.

"Currently the concession does not apply to 113 local government areas in drought," the ABL said.

"Of the 39 local government areas eligible to access the concession, 25 are within
the metropolitan areas or areas not in drought."

The ABL also wants the state government to back moves for a national carbon trading scheme.

Prime Minister John Howard last month announced the federal government was setting
up a joint task force with business to develop a carbon trading scheme for Australia.

Carbon trading would set a cap on the amount of a pollutant that can be emitted, giving
industry credits if they come in under the benchmark and allowing them to trade the credits
with those who exceed the limit.

The ABL urged the NSW government to support the scheme, but only if businesses are
not slugged with more taxes and are given enough time to adapt.

"In supporting such a national scheme, business is calling on the NSW government to
work with business to ensure the timetabling and pricing of such a scheme achieve the
desired environmental outcomes while minimising the impact on energy intensive industries
and without increasing the overall taxation burden on business," ABL said.

ABL will meet NSW Treasurer Michael Costa tomorrow to discuss its pre-budget submission.

AAP bt/wjf/cjh/de

KEYWORD: BUDGET NSW

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