Page 79 - Week 01 - Tuesday, 27 November 2012
economic growth makes housing more affordable and allows the government to maintain and enhance the high standard of living our community enjoys. It is one of the most central tasks that this government will pursue over the next four years.
MADAM SPEAKER: A supplementary question, Dr Bourke.
DR BOURKE: Can the minister outline the improvements in economic efficiency that come from the reforms?
MR BARR: Reform measures are all aimed at improving the economic efficiency of the taxation system. By the end of the current forward estimates period, the share of transaction taxes in our revenue base will reduce from 29 per cent of total taxation to 23 per cent. The share of efficient taxes will increase from 29 per cent to 38 per cent, and the excess economic burden lifted from the territory economy will be in the order of $169 million cumulatively over the next five years. In very simple terms, this means that every resident in the ACT will be better off on average by $400 per person as a result of the government’s tax reforms.
MADAM SPEAKER: A supplementary question, Mr Smyth.
MR SMYTH: Treasurer, what will rates increase by in the ACT in the next five, 10 and 15 years under these reforms?
MR BARR: The prevailing wage price index as determined in the December quarterly annually as well as the proportion of revenue replacement outlined in the first five-year tranche of reforms I delivered in this year’s budget.
MADAM SPEAKER: A supplementary question, Mr Gentleman.
MR GENTLEMAN: Minister, how many businesses will benefit from the extension of the payroll tax-free threshold from $1.5 million to $1.75 million as part of these taxation reforms?
MR BARR: I thank Mr Gentleman for the question and for his interest in cutting payroll tax for businesses, particularly in his electorate of Brindabella. I can advise the Assembly that 115 businesses that previously paid payroll tax will now no longer pay payroll tax as a result of the government’s changes. Businesses with payroll above the $1.75 million threshold will all receive a $17,125 a year annual payroll tax cut, ongoing, into the future. This will allow small and medium sized businesses to employ more Canberrans.
This is a good thing for the territory economy. It places the ACT as the most competitive jurisdiction in this country for businesses with a payroll of up to $4.7 million. These businesses are across the economy. They are in multiple sectors. It will be easier for those businesses to employ more staff as a result of this tax reform, and the government have indicated that we will continue to raise the payroll tax threshold during this term of the Assembly.