Page 2168 - Week 10 - Thursday, 26 October 1989
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Mr Berry: They argued for none.
MR HUMPHRIES: They did indeed, Mr Berry.
Mr Berry: But you just said that you did not support that.
MR HUMPHRIES: I am going to quote from that document and indicate that the arguments are very good. It states:
Because the ACT relies less heavily on payroll tax than the other States it is relatively easy for the ACT to do without payroll tax receipts and difficult for the other States to nullify the effect of the ACT initiative by abolishing their payroll taxes.
Removal of payroll tax would stimulate a variety of manufacturing and service industries in the ACT. The likely major effect would be the stimulation of labour-intensive tertiary industries but the abolition of payroll taxes would very probably also make it economic to establish completely new industries. To the extent that it led to the growth of manufacturing in the ACT, it would represent a major diversification of the economic base of the ACT.
That is a very laudable goal. As I have said, I do not support in its entirety the idea that we should abolish payroll tax at this stage. Clearly that is impossible. But, for goodness sake, we should not be going in the opposite direction.
As I have said before, payroll tax is a clumsy tax. It is a tax on employment. It necessarily, therefore, discourages employment. It would be sensible for the Government to de-emphasise taxes of this kind. Capital intensive industries, of course, pay less payroll tax than labour intensive ones, and that is a somewhat unfortunate discouragement to be making, particularly when the Government, like other governments, complains bitterly about unemployment in the ACT and elsewhere.
I want to refer in the last few minutes available to me to the consultation issues that have been raised already. I do not think I can really go beyond what my colleague Mrs Nolan has already said in this regard. The Government has made the assumption that the mere issuing of public statements, which sometimes get buried in back pages of a newspaper, is sufficient effort on its part to consult with the ACT community. I have a message for the Government: it is not. It is the duty of the Government to properly consult with people who are directly affected by measures of this kind. That does not mean taking backdoor steps to ensure that those people are properly consulted.
Mr Berry: We even consulted with you.
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