NSW shadow treasurer Mike Baird has announced a plan to cut payroll tax in another attempt to woo business owners before the state election on March 26.

 

Speaking at a debate with Labor Treasurer Eric Roozendaal, Baird says the Liberal-Nationals Coalition will consider cutting the 5.45% payroll tax rate if elected to government.

 

Victorian employers pay 4.9% payroll tax while Queensland employers are taxed at a rate of 4.75%, putting the NSW figure well in front.

 

The opposition already has plans to offer a payroll tax rebate to business, which it claims will generate 100,000 new jobs.

 

Baird said NSW businesses are penalised for operating within the state’s boundaries, so payroll tax is an issue that needs to be addressed.

 

“Every budget… is an opportunity to make NSW more competitive,” he said.

 

Australian Industry Group chief executive Heather Ridout says companies often find it frustrating to do business in NSW.

 

“It’s uncompetitive… That’s about tax; that’s about the whole business operating environment. Business has been existing despite the government for quite a long time,” she says.

 

But Roozendaal has defended government policy, saying the payroll tax rate was cut from 5.5% to 5.45% from January 1 this year.

 

Roozendaal said payroll tax in NSW has been cut twice in the past eight months and four times in two years, so it is now at its lowest point in 20 years.

 

He also said only 10% of businesses in NSW – with a wages bill above $658,000 – pay the tax.

 

“A business in Victoria with a $1.5 million payroll pays more in payroll tax than they would if they operated in NSW... This is a classic furphy of the opposition,” he said.

 

Peter Crone, chief executive of the Business Council of Australia, says existing state taxes are some of the most “inefficient and harmful” taxes for growth and competitiveness.

 

“If governments are serious about reforms to boost productivity, it’s essential that existing state taxes are phased out and replaced by a more efficient revenue source,” Crone says.