CCIQ strongly opposed to uniform payroll tax rates for all states

Wednesday 9 December, 2015 | By: Default Admin | Tags: payroll tax, tax reform, exemption threshold

The Chamber of Commerce and Industry Queensland (CCIQ) has provided strong opposition to the proposal to standardise the payroll tax rates across all Australian States.

CCIQ Director of Advocacy Nick Behrens said the Commonwealth Treasury – in the lead up to the Treasurers’ meeting tomorrow to discuss tax reform – had modelled the impact of standardising payroll tax rates across all Australian States at 6 per cent.

“CCIQ is vehemently opposed to this proposal as it would conservatively slug Queensland businesses $2.6 billion, costing at least 45,000 jobs,” he said.

“Under the proposal, depending where the exemption threshold is set, thousands of additional Queensland small businesses would also be slugged with this tax.”

Mr Behrens said that Queensland had the lowest payroll tax rate in Australia set at 4.75 per cent with the highest payroll tax exemption threshold at $1.1 million.

“Clearly Queensland offers the most attractive arrangements in Australia under this tax and our State has been a big winner from the economic activity this competitive edge has created.

“CCIQ is a strong believer in the concept of competitive federalism where each State has actively competed again each other to attract and retain business investment.

“Payroll tax is one of the most burdensome taxes upon business. If you were to redesign the tax system you would not place a tax on giving someone a job.

“Payroll tax directly impedes employment and industry growth. It is a direct tax on employment and one that is levied without any regard to a firm’s capacity to pay.”

Mr Behrens said the detrimental employment impact of payroll tax was significant.

“If jobs are the priority for the Federal Government, as they should be, then payroll tax reform is needed – not the reverse as is the case under this ridiculous suggestion,” he said.

“The negative effects of this regressive proposal and its adverse impact on international competitiveness clearly should place it at the bottom of any pile of suggestions to reform our nation’s tax system.

“Indeed, Ken Henry recommended that State payroll taxes should eventually be replaced with revenue from more efficient broad-based taxes that capture the value-add of labour.

“CCIQ believes that the use of the GST is an important part of a sensible solution to achieving an efficient and sustainable taxation mix.

“This is a once-in-a-generational opportunity to ensure the economic and business policy settings are squarely focussed on maintaining Australia’s growth momentum for the future.

“This payroll tax thought bubble is clearly at odds with any creditable proposal to lift economic growth and create jobs.

“CCIQ urges both the Commonwealth and State Governments to play a leadership role in forging unanimous agreement for changes to the GST as part of a comprehensive taxation reform.”

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