Business groups have demanded the government neither cut spending, nor increase taxes, as the state struggles with a budget sustainability crisis.
A report into the state’s finances by noted economist Saul Eslake found government policy was undermining the state’s long-term prospects. It recommended increasing taxes – notably payroll tax, vehicle registration and mining royalties – and a cut to infrastructure spending.
Tasmanian Small Business Council has slammed the payroll tax proposal.
“Mr Eslake seems to be obsessed with wanting to tax Tasmania’s 41,000 small businesses more,” TSBC chief Robert Mallett said.
“Small business is under significant pressure from things like energy prices, inflation and rising costs, increasing mainland and online competition and ever-rising wage bills – all this and more, in a sluggish economy.
“It beggars belief that Mr Eslake thinks that whacking small business with yet another tax is going to do anything other than drive small businesses to the wall, and how that assists the Tasmanian economy is a mystery.
“Any politician or political party who support reducing the tax-free threshold for payroll tax is hopelessly out of touch and need their heads read,” Mr Mallett said.
The Civil Contractors Federation Tasmania said the government must not cut spending.
CEO of CCFTas Andrew Winch said with a fragile local economy, the last thing that is needed is a reduction in infrastructure spending at the upcoming state budget.
“Civil contractors are the backbone of the Tasmanian economy and roll out their services throughout rural and regional Tasmania, any reduction in such activity would have a devastating flow-on effect,” Mr Winch said.
“The reason why the sector has been calling for a pipeline of activity is to ensure there is a flow of work in civil construction so that businesses can make longer-term investments and employ people securely.
“If this spending was now to be cut, many of our members would be facing significant impacts to a reduction of activity.”
But Property Council state director Rebecca Ellston said stamp duty reform had merit.
“Stamp duty is a direct handbrake on people’s ability to follow new job and life opportunities. It distorts behaviour, lowers turnover, locks people into inappropriate housing, dampens construction and reduces affordability.”
Finance Minister Nic Street said Labor wanted to raise taxes.
“Make no mistake, the Tasmanian Labor Opposition would follow their Victorian counterparts and raise taxes to the detriment of everyday Tasmanians,” he said.
“It seems Tasmanian Labor plans to rip $500m per year from the pockets of Tasmanians and small businesses. “
Labor’s Josh Willie said: “Labor does not support new or increased taxes.”
Last week’s Preliminary Outcomes Report showed the Liberal government delivered a record deficit for 2023-24 of $1.5bn.