Ms SACILOTTO - 2006-03-28
Can you advise Territorians about the Martin government’s efforts so far to reduce Territory taxes and how we compare to the rest of Australia? What further actions can government take to maintain our competitive tax environment? Will the Treasurer be freezing taxes?
ANSWER
Madam Speaker, I thank the member for Port Darwin for her question. I like to take every opportunity I can to continue to put before Territorians and Territory business what we have done by way of tax relief - certainly, we are the most reforming Northern Territory government ever in the field of tax reform - and what we intend to do in the weeks and months ahead. All of this, of course, while the Country Liberal Party is putting out stunts about freezing taxes. We have been cutting taxes and we will continue to do so. Over the next 12 months that will certainly be the case again.
We will be increasing the tax-free threshold of payroll tax, eliminating again around 40 businesses from the payroll tax net in the Northern Territory. That will bring to over 200, a significant number, of businesses which have dropped out of the payroll tax net since we started the tax reform process.
Mr Mills: So you will support the bill then?
Mr STIRLING: Madam Speaker, the member for Blain wants to hear this. This is instructive in terms of where we have taken the tax system from what we inherited in August 2001. We have more than doubled the threshold from where businesses pay payroll tax from $600 000 in August 2001 when we came to office to $1.25m from 1 July this year. At the same, we have reduced that rate from 6.5% to 6.3%. Businesses still in the net and still paying payroll tax will save close to $30 000 per year. So, if you are still in the net, you still get a quite significant nett saving, which is not bad compared to what we inherited.
As part of the intergovernmental agreement we put to the federal Treasurer, Peter Costello, in April last year, was a commitment that we would roll off a number of taxes through to 2009. From 1 July this year, we abolish outright leasing duty. Also, on 1 July, we abolish outright duty on non-quoted marketable securities. That is around $2m between those two measures, and around $3.1m in terms of payroll tax. So there is a nett benefit to business over the next financial year of in excess of $5m-worth of tax cuts.
The Martin government has also increased the tax-free threshold on first home owners’ stamp duty from $80 000 in August 2001 to $225 000 today – not one cent until the house costs more than $225 000. Combined with the introduction of a principal place of residence rebate, now worth $2500, we have returned to home buyers almost $30m in tax rebates; $30m that has gone out there buying white goods and furnishings in order to allow those home buyers to set their place up.
We have abolished electronic debits duty - that was worth $6m just on its own. All together, taxpayers saving of $9m.
In that process, we have achieved an objective that we set out with, and that was to make the Northern Territory the lowest taxing state or territory in Australia for small and medium businesses with up to 100 staff. So, if you have a business in the Territory with 100 staff or fewer, you know you are paying the lowest rate of taxation anywhere in Australia. That is $40m in taxes to date, and on schedule to cut another $40m this term.
In the middle of this tax cutting exercise for business, the CLP shadow Treasurer jumps up and says: ‘Let us freeze taxes.’ Madam Speaker, you would forgive us if we are a little less than overwhelmed.
ANSWER
Madam Speaker, I thank the member for Port Darwin for her question. I like to take every opportunity I can to continue to put before Territorians and Territory business what we have done by way of tax relief - certainly, we are the most reforming Northern Territory government ever in the field of tax reform - and what we intend to do in the weeks and months ahead. All of this, of course, while the Country Liberal Party is putting out stunts about freezing taxes. We have been cutting taxes and we will continue to do so. Over the next 12 months that will certainly be the case again.
We will be increasing the tax-free threshold of payroll tax, eliminating again around 40 businesses from the payroll tax net in the Northern Territory. That will bring to over 200, a significant number, of businesses which have dropped out of the payroll tax net since we started the tax reform process.
Mr Mills: So you will support the bill then?
Mr STIRLING: Madam Speaker, the member for Blain wants to hear this. This is instructive in terms of where we have taken the tax system from what we inherited in August 2001. We have more than doubled the threshold from where businesses pay payroll tax from $600 000 in August 2001 when we came to office to $1.25m from 1 July this year. At the same, we have reduced that rate from 6.5% to 6.3%. Businesses still in the net and still paying payroll tax will save close to $30 000 per year. So, if you are still in the net, you still get a quite significant nett saving, which is not bad compared to what we inherited.
As part of the intergovernmental agreement we put to the federal Treasurer, Peter Costello, in April last year, was a commitment that we would roll off a number of taxes through to 2009. From 1 July this year, we abolish outright leasing duty. Also, on 1 July, we abolish outright duty on non-quoted marketable securities. That is around $2m between those two measures, and around $3.1m in terms of payroll tax. So there is a nett benefit to business over the next financial year of in excess of $5m-worth of tax cuts.
The Martin government has also increased the tax-free threshold on first home owners’ stamp duty from $80 000 in August 2001 to $225 000 today – not one cent until the house costs more than $225 000. Combined with the introduction of a principal place of residence rebate, now worth $2500, we have returned to home buyers almost $30m in tax rebates; $30m that has gone out there buying white goods and furnishings in order to allow those home buyers to set their place up.
We have abolished electronic debits duty - that was worth $6m just on its own. All together, taxpayers saving of $9m.
In that process, we have achieved an objective that we set out with, and that was to make the Northern Territory the lowest taxing state or territory in Australia for small and medium businesses with up to 100 staff. So, if you have a business in the Territory with 100 staff or fewer, you know you are paying the lowest rate of taxation anywhere in Australia. That is $40m in taxes to date, and on schedule to cut another $40m this term.
In the middle of this tax cutting exercise for business, the CLP shadow Treasurer jumps up and says: ‘Let us freeze taxes.’ Madam Speaker, you would forgive us if we are a little less than overwhelmed.
Last updated: 09 Aug 2016