Cuts to payroll tax currently being considered by the Victorian Parliament this week, with a view to taking effect on 1 January 2007, will provide a timely boost to the Victorian economy at a time when the Victorian Government’s 2006-07 Budget Update reveals a strong projected surplus going forward.
The Update reveals that the revised net result from transactions is $374 million, slightly lower than the $419 million forecast in the Pre-Election Budget Update, with the main variation being from the planned bring forward of payroll tax cuts by six months, as well as election commitments to cut stamp duty and extend the first home owners bonus.
The Victorian Parliament is currently considering legislation that reduces the payroll tax rate from 5.15 percent to 5.05 percent. This reduction was due to take place on 1 July 2007 but was brought forward after VECCI lobbying in light of the continuing drought.
“This payroll tax cut is timely because a number of factors are taking their toll on our industries and the wider economy”, says VECCI Chief Executive officer Mr Neil Coulson.
“Mainstay Victorian industries such as food processing and automotive products are being heavily affected by factors such as historically high fuel prices, increases in interest rates, the continuing drought and a relatively high Australian dollar.
“With the onset of summer, bushfires also pose a significant threat to the tourism industry in certain parts of the State, with areas of Gippsland and North Eastern Victoria already suffering significant and ongoing damage.
“Cuts in payroll tax since the 1990s have coincided with significant jobs growth in Victoria and payroll tax revenue has also risen in line with a stronger Victorian economy”, says Mr Coulson. |
