A CUT of regional payroll tax to just one percent could cost the state government coffers tens of millions of dollars each year, but it is a small price to pay for the Coalition’s decentralisation to be a success says opposition leader Matthew Guy.
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My Guy’s election bus roadshow drove into Ballarat on Monday morning on the first official day of the state election campaign.
He came bringing a gift of a cut to regional payroll tax in order to attract more businesses to the city as he sets a goal of seeing Ballarat’s population reach 200,000 by 2050.
Mr Guy visited Findlay Engineering in Mitchell Park to examine how his announcement at Sunday’s campaign launch will affect workers on the ground.
“Our plan will see the lowest rate of payroll tax anywhere in Australia,” Mr Guy said. “That incentive will allow businesses like Findlay Engineering to employ new staff, to invest in their machinery, to bring new jobs in outside of Melbourne.
“It’s about planning for the next generation, not just the next election. We need to have realistic incentives to decentralise our state and our population and payroll tax reduction is a real and tangible way to do that.”
My Guy said there would be a budget hit to make the plan work.
“We understand it will take a hit to our forward estimates,” he said.
“It will be clear, it will be costed and precise and we are very confident we can not only pay for it but will reap greater dividends for the state.”
The State Government has already moved to cut payroll tax from 4.85 to 2.425 per cent in regional centres making it half the metropolitan rate.
Businesses across Victoria are estimated to have saved around $114 million on payroll tax since July 1 last year, including more than $48.4 million as a result of successive increases in the payroll tax threshold.
In August it was estimated business had saved $65.9 million since July last year.
Managing Director Findlay Engineering Chris Findlay said he estimated the Coalition cut would save his company $3500 a month.
“Payroll tax has always been a huge burden on business,” he said. “Any reduction is most welcome.
“It gives us confidence to build on future projects and investments. We’d be looking to put on more people, currently we have about 50 working here.
“Payroll tax is certainly better here than it is in town, but this will make it even better.”
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