Business urges new NSW Premier not to abandon payroll tax cuts

The NSW Business Chamber is urging new Premier Nathan Rees not to cut back on payroll tax relief, as he attempts to repair a $1 billion hole in the state’s economy.

The NSW Business Chamber is urging new Premier Nathan Rees not to cut back on payroll tax relief, as he attempts to repair a $1 billion hole in the state’s economy.

Rees says “everything is on the table” regarding cutbacks, but Business Chamber chief executive Kevin MacDonald says it cannot accept the possibility of abandoning the payroll tax cuts handed down in the NSW budget in May.

“We’d be strongly urging them not to change in any way the relief that was given to SMEs with the payroll tax cuts in the budget. They’re measures that have been long-called for by businesses,” he says.

MacDonald says this relief is most needed for small businesses that have only a handful of employees.

“We’ve got businesses facing high costs, even with the interest rate cut last week, and higher petrol prices. This is not the time for government to be hitting businesses.”

Rees, who was appointed Premier last week after the shock dumping of Morris Iemma and the sacking of treasurer Michael Costa, says he will keep Iemma’s promise of delivering a mini-budget by November in an attempt to solve a slump in property taxes.

“NSW is overexposed to revenue from the property sector,” Rees says. “If the slowdown in economic activity continues, it will affect revenue by around $1 billion – if that $90 million a month shortfall maintains itself.”

Rees also says former treasurer Costa “knew better than anyone the state of the finances, and we’ve been delivered a very serious challenge”.

NSW has faced slower economic growth than expected and a troubling real estate market, with only 31,000 new homes approved in 2007-08, the lowest figures on record.

“We’re not broke, but we face a number of very serious challenges,” Rees says. “We need to make sure our revenues are on track to make sure our debt levels can be repaid without threatening the credit rating.”

This year’s NSW budget predicted a $700 million surplus but has since fallen to $268 million. The surplus was intended to assist infrastructure development spending, but Rees says projects such as the $12 billion north-west rail line are now likely to be delayed.

Rees, who has been a member of Parliament for less than 18 months, has been criticised by some for his lack of experience.

The Premier’s new cabinet, announced today, includes Eric Roozendaal as Treasurer, David Campbell for Transport and Verity Firth taking over the Education and Training ministry.