Call For Cuts To Taxes

Newcastle Herald

Monday April 14, 2008

PETER SHINNICK THE CHAMBER

THE signs are emerging of a difficult time approaching for Hunter business.

The cumulative effects of increasing interest rates, the tightening of finance by banks and the seemingly never ending increase in world petrol prices is finally flowing through to households.

A number of recently released indicators show economic activity is slowing and retailers claim consumer confidence is at a 5-year low. In 2008, spending will grow at half the 2007 rate.

New car sales dropped in March, job vacancies have declined, and building approvals are flat, although the Hunter fortunately is an exception to this.

While some Hunter businesses are immune from these effects, many aren't.

They are seeing a fall in demand for their products that has hit hard in the last two months corresponding to the period of the last two interest rate increases and the price of petrol reaching $1.40 a litre.

A banking business regional manager told me applications for business loans have stopped. A large Hunter RSL general manager said he will lose $50,000 in March and probably the same in April. These stories are not exceptional.

In the difficult business environment, the Hunter Business Chamber reckons there is sufficient flexibility for governments to review the costs it imposes on business, particularly given recent advice of a windfall of funds flowing to all governments from business taxes.

A recent mid-term review of budget papers indicated NSW will reap an additional $630 million this financial year from conveyancing and payroll taxes. Notwithstanding the NSW Treasurer's planned moves to cut stamp and mortgage duties, the Hunter Business Chamber calls for action on payroll tax in the 2008-09 budget. NSW has the highest rate of payroll tax. This is a disincentive to business.

It is time NSW businesses, now providing record levels of funding to governments, are given relief. A payroll tax cut in the 2008 state budget is the place to start.

Peter Shinnick is CEO of Hunter Business Chamber

© 2008 Newcastle Herald

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