Hansard debates

Mrs McARTHUR (Western Victoria) (15:03): I too rise today in support of Mr Quilty’s motion to reduce the burden of payroll tax on Victorian businesses. While I am very pleased to support Mr Quilty’s motion, like Mr Finn, I do not believe it goes far enough. We should not only be reducing payroll tax, we should be abolishing it, because any government that wants to argue legitimately for the creation of jobs while hypocritically applying a tax on job creation is not real to itself.

Mr Finn: Not fair dinkum.

Mrs McARTHUR: Not fair dinkum at all, Mr Finn. Payroll tax is just a job-destroying and growth-inhibiting tax, and it is one of the worst that we have in this state. Sadly, I have got to admit it was first introduced by Sir Robert Menzies’s government in 1941 to finance the provision of child endowment. But like all taxes, they come in for the right reasons often—and that was to pay a child endowment to each mother—but the original purpose often withers away with the passing of time but the tax never seems to disappear. Unsurprisingly it often increases.

Payroll tax is not only financially onerous for businesses but also administratively costly. Businesses are forced to be tax experts, constantly burdened with legal definitions for wages and the various exemptions. We must also acknowledge that we cannot simply reduce payroll tax for some businesses, because according to the Henry tax review all workers, not just those in businesses remitting payroll tax, bear the tax burden through lower wages.

In this state do those opposite want more workers employed in higher paying jobs, or do they want the government to collect more tax? Payroll tax is a disincentive to taking on more workers and to providing workers with increased remuneration. You cannot believe that anybody opposite would be arguing for a tax on jobs. It should be an anathema to everything you stand for. You should be arguing for it to be abolished. Businesses subject to payroll tax are less likely to remunerate workers through higher wages while subsidising a wasteful government through a jobs tax.

We absolutely support Mr Quilty’s motion. Payroll tax is a bad tax for everyone. As one very well known Australian once said, ‘I’d be happy to pay more tax if you could only assure me that you were spending it wisely’, and clearly in this state we have grave questions over the way that money is spent by this government. So congratulations, Mr Quilty, on putting forward this motion. We are happy to support it.