Date issued: 3 June 2008

Responding to the Queensland Government's Budget handed down today, CPA Australia's senior tax counsel Garry Addison said 'The further pay-roll tax relief, the abolition of mortgage duty and the proposed extension of the first home buyer duty exemption announced in the Budget will go some way towards improving housing affordability, particularly for first home buyers. Property investors will also welcome the proposed land tax relief measures.' 

CPA Australia is concerned, though, with the announced $600 million increase in coal mining royalties, which is effectively a significant tax increase, which has not occurred in the other major coal mining states (New South Wales and Westerna Australia) and could adversely impact the competitiveness of the Queensland industry in the short-term. 

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

Mr Addison 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 and other wider changes would constitute real reform of Queensland's business tax structure and could be funded from a combination of ongoing growth in GST revenues, expenditure restraint and appropriate assistance from the Australian Government, ' he 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.

Mr Addison 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 recent introduction of legislation to harmonise its payroll tax laws with those of New South Wales and Victoria is welcome because it should assist small business. However, 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 Mr Addison.

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

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