VACC call for tax relief
BY NEIL MCDONALD | 10th Nov 2006
The VACC claims Victoria’s financial coffers are "overflowing with revenue through stamp duty" that is $600 million more than original estimates.
The state has also accumulated $3.3 billion in payroll tax for the past financial year, up $252 million, according to the VACC.
In the face of an $825 million budget surplus in Victoria’s finances for 2005-06 – against its own initial forecast of $365 million – the VACC wants some of this money to flow back into the electorate.
It claims Victoria’s businesses have paid almost 10 per cent more payroll tax in the last financial year than in the previous year as a result of low unemployment and higher wages.
"VACC calls on the government to return some of the massive budget surplus it has collected through windfall gains in tax collections," VACC executive director David Purchase said last week.
"Payroll tax, land tax, stamp duty on house sales and vehicle sales, taxes and levies on insurance have all contributed to a massive state government revenue windfall.
"Most employers would be astonished to learn that they paid, collectively, $3.3 billion in payroll tax for the year to June 30.
"Those who are building their businesses in a fiercely competitive environment, and putting their assets on the line in shouldering risk, are entitled to be aggrieved at this level of tax.
"While the cuts announced by the treasurer at the last state budget are welcome, a scheduled reduction to five per cent from 5.25 simply does not cut deeply enough.
"Payroll tax is a tax on employment and a double-burden on employers. It is unfair and undermines the competitiveness and profitability of business." Mr Purchase welcomed a promise by opposition treasury spokesman Robert Clark to relieve stamp duty for home buyers and business, and has called on the treasurer John Brumby to give a similar commitment to tax reform.
"Payroll tax was identified as a tax that was to be replaced by the GST.
"This was the undertaking given by the Howard Government. The states should do as the federal treasurer has requested and do away with the state taxes the GST was intended to replace, or hand back the GST," Mr Purchase said.
"The budget windfall shows there is ample room for cuts to payroll tax, land tax and stamp duties on vehicle and property sales.
"We call on the treasurer to urgently announce reform of state taxes to ensure that Victoria’s competitive position can be protected."