Page 2262 - Week 07 - Wednesday, 3 August 2016
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again, are largely through the business sector, albeit through gambling products, you get well over 50 per cent of the own-revenue that this territory raises coming from the business community.
Tellingly, the Chief Minister has conversely blamed business for not doing enough heavy lifting and has even said on radio in this term of the Assembly:
The private sector are not exactly stepping up to the plate at the moment making large investments, although we are seeing that. We are going overseas for that because we do not think we are going to get it locally.
It is no surprise, Chief Minister, that you are not going to get it locally with such punitive rates, taxes and charges being applied by you in your time as Treasurer and continuing whilst you occupy the chair of Chief Minister.
This year’s budget also tells us that payroll tax is bringing in $439,977,000. That forms 26.9 per cent of the own-source revenue that the territory is taking in this year. The Chief Minister is always quick to respond to payroll tax by saying, “The ACT has the highest tax-free threshold when it comes to payroll tax in the country.” On that fact he is right. We do, thankfully, have one of the highest tax-free thresholds in the country. But the story that is never told, the story that the Chief Minister never, ever elaborates on, is that when you start paying payroll tax in this city, it is the most aggressive rate of taxation of any jurisdiction in the country.
A small business in the ACT that has a payroll of $2.5 million is paying about $34,000 a year in payroll tax. That equates to, at that rate, the cheapest payroll tax jurisdiction for a company with a payroll of $2.5 million. If the business is successful and it grows and it has invested and hired more people, created more opportunities for locals to get a job, which is what we all want to encourage business in this jurisdiction to do, and it gets to the $5 million mark in its payroll, it drops to the third cheapest in the country. Queensland has the gong for being the most efficient, at $185,000. In the ACT you would be paying $205,000.
Businesses, though, push through that, they persevere, they still continue to grow, they have invested further in their business, they have invested further in this city to make this their home and develop a larger workforce to become the successful business that we want them to be, they hit the $7.5 million mark in their payroll. That would be a great success story. But all of a sudden we slip from being the third most affordable jurisdiction as far as payroll tax goes to the second most expensive. You would be paying $376,000 in payroll tax in the ACT. The only jurisdiction dearer than us is Tasmania, at $381,000.
But just assume for a moment that you manage to grow the business even further, you have invested more, you have grown more, you have employed more people, given more Canberrans an opportunity to grow, and you hit the $10 million mark. By this stage you are becoming a fairly large business, obviously with a national presence. We are now the dearest jurisdiction for payroll tax. The ACT, at $10 million payroll, is the most expensive jurisdiction in the country for a business to be hiring, paying $548,000 in payroll tax to the government because of their success. In Queensland,
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