Page 2227 - Week 07 - Thursday, 23 June 2005
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always been troubled that payroll tax is a tax on employment. One has to temper that with the revenue needs of the territory but I find that the general principle of payroll tax acting as a punitive measure on those who create the largest number of jobs is a tax policy contradiction, and I suggest to the government that it is certainly one that represents something of a contradiction to the philosophy of trying to create growth and employment.
I have never understood why large employers—and I think of somewhere like my former industry, the hotel industry, in which places such as the Hyatt employ hundreds of young people in this city, not only through their main hotel but also through the facilities they manage such as the Australian parliament facilities, the national museum and various other set-ups—should be hit with such a level of additional payroll tax. So the issue of the magnitude of payroll tax on those firms, which in many cases may be operating on reasonably thin margins, if trading profitably at all, is of concern.
Whilst we as a party are advocates of simplified and fair tax systems and treatments—anomalies must be addressed and there should be equity in those arrangements—I am somewhat troubled by the overall magnitude of payroll tax and the burden on employers. The government says it wants to see employment increase but in the same breath obviously they impose payroll taxes. I think there is this constant challenge between the line of argument that they seek to create employment and the quest for taxation from the private sector. Certainly, in terms of the philosophy, I fear that the principle of generating tax revenue, even if it impacts adversely on the capacity of private employers to create employment, is paramount in their consideration.
Employee share ownership schemes are a way of strengthening the bond between employees and the firm for which they work and improving productivity through closer and more visible links between effort and result. Nowadays, share employee schemes are recognised as an incentive to encourage greater participation of employees in the affairs of their firm and the commonwealth Income Tax Assessment Act specifically excludes shares and rights acquired under an employee share acquisition scheme from fringe benefits tax.
Can I suggest to you that for those who are possibly further to the left of the spectrum than I am, on first read the employee share ownership scheme may seem to be the epitome of capitalism. Those of us in this Assembly who are not as young as others well recall that in the 1970s Mr Hawke was a great believer in the union movement getting into owning enterprises. I would suggest to you that this was really another form of the concept of employees engaging in share ownership, albeit it on a collective basis. In many cases this was a rather ill-fated exercise as far as retailing and fuel operations were concerned. But the principle, indeed, was the same.
This was very successful in Israel through the Histadrut trade union organisation. The idea of employee ownership of businesses has been tried in various shapes and forms over the years. It has been tried with a reasonably good degree of success in the United States airline industry where arrangements could be negotiated because employees saw the welfare of their business as being very closely linked to their own personal position. I know, for example, that United Airlines got through some difficulties because those arrangements were in place.
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