Page 1363 - Week 05 - Tuesday, 10 May 1994
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I would like to make two quick comments in answer to members' comments. First of all, on the general question of payroll tax itself, there would not be a member in this Assembly who would not want to see it abolished if that were possible. However, the payroll tax, worth about $90m a year to the Canberra community, is one of our major revenue sources. It is also a tax that is imposed by every State in Australia, with the exception of Queensland. I think that for us to unilaterally remove it without any indication of what other revenue source might take its place would be just plain irresponsible.
I also say to members that Queensland, whilst not imposing a payroll tax, does not have the kind of record in jobs growth or in reduced unemployment that the argument that Mr Stevenson was putting forward seems to imply. In other words, as far as I am aware, the evidence is simply not there that unemployment in Queensland is lower because they do not have a payroll tax. In fact, the unemployment rate in Queensland is amongst the higher rates in the country. There is, as far as I am aware, no evidence either that businesses and companies have been flocking to Queensland in order to avoid payroll tax. They simply have not. It is but one of many costs of doing business that have to be taken into account when businesses take the decision as to where to establish.
Mr Westende: Hear, hear!
MS FOLLETT: I am sure that Mr Westende would agree with that. I think the argument that, if you abolish payroll tax, jobs will grow and businesses will flourish, whilst being superficially attractive, is not borne out on the evidence we have.
I would also like to remind members that payroll tax is a tax which applies to the larger employers in our community. There is a threshold on it. I think there must be 15 to 20 employees before a business is liable for payroll tax.
Mr Westende: It depends on what you pay them.
MS FOLLETT: It does depend on what you pay them, as Mr Westende says; but I think on average about 15 employees would qualify you. A large number of Canberra businesses, of course, are quite small. Small business makes up the greater sector of our private businesses. This tax is applied to the large retailers, the large banks and other bigger companies, many of which are national. I am sure that we would all like to abolish payroll tax. I would like to abolish a whole range of taxes. But the Government has to protect its revenue base in order to deliver services to the people of the Territory, and this is a very important part of that revenue base.
Madam Speaker, with regard to the retrospectivity and the question of the Commonwealth consulting us before it introduces legislation such as the changed fringe benefits arrangements that we are dealing with here, I suspect that the Commonwealth, like most governments and like my own, does not normally consult widely on revenue measures, for the simple reason that if you are to forewarn of a proposed revenue measure there can be a great deal of activity designed to avoid that revenue measure, so you defeat your purpose.
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