The Canberra Business Chamber has slammed the Labor government’s announcement of a payroll tax rate of 8.75 per cent for large businesses in the ACT.
The government’s move follows it caving in on Monday to pressure from the Greens to reduce the budget’s $250 health levy to $100 for domestic ratepayers. Businesses will still be charged the full $250.
Chamber chief executive Greg Harford said the payroll move was “nothing more than a tax on jobs and sends completely the wrong signals to the business community around Australia and the world.”
Ironically, Chief Minister Andrew Barr is at the World Expo in Osaka this week, using its “global platform” to extol the virtues of Canberra in fostering “international partnerships and investment opportunities”.
Mr Harford said: “While only a relatively small number of businesses will be affected, the impact on them will be large. It will inevitably mean that increased costs are built into higher prices or that businesses look, over time, to reduce their people in the ACT.
“Some of the firms impacted will be primarily working for the federal government, but others will likely be providing goods or services to everyday Canberrans.
“The next highest payroll tax rate around the country is 6.1 per cent, meaning that for large businesses we will be 43 per cent less competitive than the next highest-taxing State.
“The new Jobs Tax announcement does not make us attractive for large businesses. Indeed, it takes us in completely the wrong direction and will stifle growth, innovation and competition, while encouraging firms to do business in other jurisdictions.
“We understand the ACT Government has limited sources of revenue, including from the Commonwealth, and we support the provision of quality health and education services. However, the Chamber thinks the ACT government needs to look very closely at spending across all revenue lines before hiking taxes further.
“In the current cost of living crisis, individual households and businesses are having to tighten their belts to deal with rising costs – and it’s time the government looked seriously at doing the same. Business is not a golden goose that can be indefinitely taxed. Across the government’s total spending of $8.8 billion, there have to be productivity dividends that could save money.”
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