Federal Government's third stimulus package must address Payroll Tax
29 April
Chamber of Commerce & Industry Queensland (CCIQ), the state's peak industry employer, has called on the Federal Government to include funding for a reduction in payroll tax in its third stimulus package to be announced as part of the May Budget.
President, Beatrice Booth, said in the wake of rising unemployment across Australia, CCIQ is proposing the Federal Government fund a temporary 50 per cent payroll tax cut for the next financial year (2009-10) to provide relief for businesses.
"The business community has indicated that while the beneficial impact of the second stimulus package cash bonus is welcome, it is proving to be limited," Mrs Booth said.
"There is growing concern that consumers will save the cash bonus, use it to retire personal debt or purchase imported items rather than spend it locally, which is what is needed to assist struggling businesses."
Mrs Booth said Queensland's rapidly rising unemployment rate of 4.8 per cent supports the urgent need for the Federal Government to provide funding to the states for a 50 per cent payroll tax holiday across the entire country to take some of the pressure off business operators.
"During March, 9,000 Queenslanders lost their jobs. This sobering statistic confirms what we have been hearing from Queensland businesses for months - that they have been under immense pressure from the global recession," Mrs Booth said.
"State Governments impose a tax on employers every time wages are paid, consequently penalising employment. The burden of payroll tax invariably falls upon those labour intensive industries such as mining and manufacturing, currently doing it particularly tough."
Mrs Booth said it is unconscionable for governments to tax jobs when unemployment is steadily rising each month. The Federal and State Governments must do the right thing, and reduce payroll tax.
"A 50 per cent payroll tax holiday would save businesses in Queensland approximately $1.5 billion and would save jobs during this recession," Mrs Booth said.
"Payroll tax receipts have increased by over $1.5 billion or 136.4 per cent since 2000-01, with Queensland businesses paying $2.8 billion in payroll tax. Payroll tax as percentage of state taxation revenue has, over the same time, increased from 24.4 per cent to 30.0 per cent."
"We recognise the importance of payroll tax to State Government, which is why we have called on the Commonwealth to intervene and assist the states to do something meaningful to protect employment.
We are also calling on the Bligh Government to lobby the Federal Government at COAG to take up the payroll tax holiday to help keep Queenslanders in jobs and keep businesses open. We need to provide more targeted relief for business if we have any hope of keeping a lid on unemployment."
There is no more important issue for government leaders to tackle than the prevention of unemployment. The causes, such as cost pressures and taxes on businesses, have to be addressed, not just the consequences of unemployment.
A decision must be made to provide relief of a temporary nature to the levying of payroll tax until the economic downturn subsides. CCIQ research overwhelmingly reveals that a payroll tax holiday would be directly used to help save jobs.
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Media contact
David Argus
General Manager - Public Relations & Media
Chamber of Commerce & Industry Queensland
t: 07 3842 2263
m: 0418 523 343