Date issued: 5 June 2007

Responding to the Queensland government’s Budget handed down today, CPA Australia's Queensland President Loretta Seamer said ‘The proposed land tax relief and cuts to nuisance taxes such as mortgage duty announced in the Budget will go some way towards improving the lot of small business.’

CPA Australia noted that the increase in motor vehicle duties means that the net tax cut delivered by the Budget amounts to only $49 million, which Ms Seamer said was ‘a drop in the bucket’ compared with the state government’s total budgeted revenues of $32.551 billion in 2007/08.

‘Rising property prices, combined with the progressive duties and land tax structures, are the main reason behind the growing tax burden on small business, ‘ Ms Seamer said. She also noted that this is expected to continue in 2007/08 as the government’s own figures reveal that total tax revenue is expected to increase by 10.7 per cent in 2007/08, with a significant proportion of this increase coming from property owners.

While land tax cuts can provide some relief in the short term, CPA Australia believes that more fundamental reforms are necessary to address the problem permanently in the longer term.

Ms Seamer said that, although the government is continuing to remove some of the minor stamp duties listed in the GST agreement with the Commonwealth, it had not taken action to reduce or abolish duty on business/commercial property transfers in accordance with the agreement.

‘This would constitute real reform of Queensland's business tax structure and could be funded from a combination of ongoing growth in GST revenues and expenditure restraint,’ she said.

While CPA Australia welcomes the additional outlays on major economic and social infrastructure projects and believes that the use of debt to fund such projects is consistent with intergenerational equity considerations, it believes that more should be done to clarify the links between such spending and economic growth.

CPA Australia said that  the potential rationale and role of private finance arrangements through public/private partnerships (PPPs) should also be made more transparent.

‘The government’s payroll tax harmonisation package is welcome because it should assist small business, but it would be even more welcome if it started earlier than the current proposed date of 1 July 2008. Further reductions in the cost of compliance for small business in respect to both regulatory and tax requirements are also needed . CPA Australia has pushed for this for some time,’ said Ms Seamer.

Garry Addison, CPA Australia’s senior tax counsel, is available for comment.

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