Page 4861 - Week 16 - Tuesday, 26 November 1991
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Another particularly pertinent point in relation to payroll tax, as I am sure Mr Kaine knows, is that small businesses do not pay payroll tax. Small businesses do not have a payroll in excess of half a million dollars, which is the threshold for the payment of payroll tax. A vast number of ACT businesses fall into the category of small business. So, even if payroll tax were to be abolished, they would not benefit from a 7 per cent reduction in payroll tax, because they do not currently pay it. On the other hand, they would, of course, be required to pay a 15 per cent goods and services tax. So, how anybody could possibly argue that small businesses would be better off under that regime and would employ more people, I simply fail to see.
Because of the predominance in our business sector of small businesses, the abolition of payroll tax would seem to me to put them on the same basis for doing business as large businesses. Whilst they might benefit from the abolition of the 7 per cent payroll tax, they would be put in exactly the same tax position as big business. It seems to me that that would be very much to their disadvantage.
I think that there are grave problems with the scheme that Dr Hewson has outlined. My interest, of course, is in the impact of Dr Hewson's proposal on the ACT. It is my firm belief that it would be disastrous for the ACT if Dr Hewson were ever to come to power - I do not believe that he will - and if he were ever to implement this preposterous proposal that he has outlined.
MR KAINE: I have a supplementary question, Mr Speaker. Since the Treasurer clearly demonstrates her absolute ignorance of the general proposals put forward by Dr Hewson, I again ask the question: Are you in favour, or not in favour, of the abolition of payroll tax through adjustment of the Commonwealth-State financial relationship? You did not answer the question, and I ask it again.
Mr Berry: I take a point of order, Mr Speaker. The question has been fully answered.
MR SPEAKER: That is not a point of order, Mr Berry. It is up to the Chief Minister to decide whether she wishes to take the question further or not.
MS FOLLETT: Mr Speaker, I believe that I have answered the question.
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