NSW Labor vows payroll tax relief

NSW Labor will look to slash red tape for tens-of-thousands of businesses if elected in March by reforming payroll tax, allowing businesses to lodge their monthly tax return directly with the ATO.

Opposition Treasury spokesman Daniel Mookhey says the announcement was a ‘practical, deliverable’ initiative. Picture: Chris Pavlich

NSW Labor will look to slash red tape for tens-of-thousands of businesses if elected in March by reforming payroll tax, allowing businesses to lodge their monthly tax return directly with the Australian Taxation Office.

The move will see a Minns government look to create synergies by entering a partnership with the federal government, providing the 52,000 businesses with the option of bypassing Revenue NSW.

If successful, the move would allow NSW businesses to take advantage of the federal government’s “single-touch” payroll system, enabling them to transmit real-time data.

Under the current system, businesses need to lodge monthly returns with the state government, make monthly payments and fill-in an annual payroll tax reconciliation.

Opposition Treasury spokesman Daniel Mookhey said the announcement was a “practical, deliverable” initiative, and that the NSW economy needed to “move with the times”.

“NSW businesses shouldn’t need to burn their energy dealing with bureaucracies. We want to free up their time so they can get on with growing their businesses, and creating jobs,” Mr Mookhey told The Australian.

“We want a win for NSW jobs, a win for NSW businesses – as well as a win/win solution for both the state and the commonwealth.”

Mr Mookhey downplayed expectations that the reform could be delivered immediately if Labor were elected, as it was reliant on negotiations with the Albanese government.

But he said he would look to begin the “necessary conversations” if Opposition Leader Chris Minns was victorious in March. “We won’t be able to deliver a reform like this straight away. But we will start having the necessary conversations with the commonwealth,” he said.

Under the initiative all state revenue from payroll receipts would continue to flow to NSW, while having no impact on the state’s legislative powers.

The tax reform comes behind a string of policy announcements for NSW Labor ahead of the March state election.

Mr Minns launched Labor’s flagship housing policy on Monday, promising to exempt stamp duty for first homes on properties valued up to $800,000, while increasing the concessions for those sold up to $1m.

Independent modelling undertaken by the NSW Parliamentary Budget Office on behalf of Labor said the stamp duty exemption would affect 95 per cent of first home buyers.

It was a response to the government’s pared back reform of stamp duty for first home buyers, providing an option to choose a yearly $400 property tax plus 0.3 per cent of the property’s land value on homes valued at less than $1.5m.

Labor has branded the NSW government’s land tax reform as a “forever tax on the family home”.

If elected, Labor announced it will merge two existing government bureaucracies into a new agency, “Homes NSW”, in a bid to address the more than 57,000 people on the state’s housing register waiting list.

Opposition finance spokesman Anoulack Chathivong said the ATO’s modern technology was considered reliable and efficient by many Australian taxpayers and businesses who had experienced it. “Using the Single Touch Payroll helps every eligible business manage their taxation requirements better and improves their workplace productivity and efficiency,” he said.