Date issued: 19 June 2007

CPA Australia welcomes today’s NSW Government budget which demonstrates a commitment to improving infrastructure and providing some tax relief for business, home-owners and property investors.

CPA Australia’s State Budget Analyst, Garry Addison FCPA, says that, while greater spending on infrastructure will help grow NSW and drive economic activity there is still a need for tax reform in NSW. 

'This boost to infrastructure in NSW over the next year will hopefully show real improvements to service delivery and generate economic activity,' he says.

'The cutting of land tax from 1.7 per cent to 1.6 per cent and mortgage duty reductions will go some way to helping small businesses. We also welcome measures being taken to harmonise payroll tax across NSW and Victoria, as this will be beneficial for businesses, particularly small to medium enterprises operating in both states.

'However, CPA Australia believes that more fundamental reforms to the tax system are still needed. We had hoped to see greater changes, particularly the removal of duty on business/property transfers in accordance with the GST Agreement with the Commonwealth,' Mr Addison said.

To develop an effective and competitive taxation system CPA Australia believes there is a need for greater reform of state tax arrangements. There is also a need for a more transparent, efficient and sustainable framework for Commonwealth/State financial relations.

CPA Australia’s NSW Division Director, Ron Switzer FCPA, also commented that although the Government is continuing to remove some of the minor stamp duties, no action had been taken in the budget to offer payroll tax relief or reduce compliance costs for small business.

Mr Switzer says, 'There are a number of issues with the state tax system that need to be addressed and we would welcome an independent inquiry with a view to significant rationalisation and reform of the existing NSW tax structure. Tax relief could be funded from a combination of ongoing growth in GST revenues, expenditure restraint and appropriate assistance from the Commonwealth.'

The organisation notes that the NSW Government has established the Small Business Review Taskforce to look at compliance issues and looks forward to positive outcomes.

While CPA Australia supports the increased spending on infrastructure, Mr Addison says that the NSW Government needs to make sure this is done in a financially responsible manner.

'A particular focus needs to be directed to high social impact areas that do not provide an ongoing revenue stream, such as non-commercial enterprises including hospitals and schools. It is pleasing to see the NSW Government is investing heavily in these areas, since improvements to hospital, school and public housing services is crucial to the community,' he says. 

Editor’s note: Garry Addison, CPA Australia’s State Budget Analyst is available for comment

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