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New payroll tax rate cut of 5.5% starts today

The Illawarra’s largest business organisation, Illawarra Business Chamber, has welcomed today’s cut to the payroll tax rate as an incentive to boost employment and a step towards making NSW more competitive with other Australian states.

The NSW payroll tax rate has been cut today to 5.5% from 5.65%, six months earlier than originally scheduled. A further cut to 5.45% is scheduled from 1 January 2011. The payroll tax threshold will also increase to $658,000 from today.

“Today’s payroll tax cut to a rate of 5.5% completes the NSW Government’s commitment to cut the rate over three years from 6.00% to 5.5% - a campaign the Illawarra Business Chamber in conjunction with NSW Business Chamber has pursued for many years,” said Greg Fisher, CEO of Illawarra Business Chamber.

“These cuts represent a $300 million reduction in the cost of doing business in
NSW. The cumulative saving of payroll tax cuts from 6.00% to 5.5% will save NSW businesses about $1.9 billion over the period.

“NSW’s payroll tax rate is now half a percentage lower than it was three years ago and that is an incentive for employers to grow their businesses and hire more people.”

“However, Queensland and Victoria have payroll tax rates less than 5%. The NSW Government should continue its campaign to cut payroll tax beyond 2011 and provide a stronger incentive for employers to choose NSW as the place to do business.”

Illawarra Business Chamber had proposed a fully-funded plan to cut NSW’s payroll tax rate to 4.95% by 2015 as part of its pre-election blueprint, “10 Big Ideas to Grow NSW”.

Mr Fisher said that Victoria was also cutting its payroll tax rate further to 4.90% today and that NSW could not afford to sit still on its payroll tax rate.

“A lower payroll tax rate in Victoria is an incentive for businesses to by-pass NSW and set up shop in Victoria. We need to continue the drive towards a more competitive tax rate with the other states.” Mr Fisher concluded