Date issued: 12 June 2008

Leading accounting and finance body CPA Australia welcomes the Tasmanian's Government commitment to  invest in irrigation and transport infrastructure, but believes more needs to be done to reform state taxes, and in particular, payroll tax.

Responding to today's state budget CPA Australia's Tasmanian president, Paul Viney, said he was pleased to see the Tasmanian government allocating money for several large infrastructure projects, including funding for major irrigation projects and the Brighton Transport Hub.

Mr Viney said this would be of 'significant benefit' to the state.

'The emphasis on increasing funding towards major infrastructure projects is certainly welcome and this should generate economic activity across Tasmania. However, the value of the Brighton rail and road transport hub remains in question whilst the ongoing ownership and viability of Tasmania's rail network is uncertain.'

Mr Viney has also welcomed the government's commitment to developing the skills of Tasmania's ageing workforce.

'We are pleased with the government's investment in new funding to implement its Skilling Tasmania initiative and Workforce Participation Program. More needs to be done to address the skills shortage in this state and the Government's initiatives are certainly a step in the right direction.'

CPA Australia praises the establishment of a Business Tax and Regulation Reference Group and looks forward to working with the appointed chairman, Keith Stacey, to achieve further improvements and reform to Tasmania's somewhat ‘out of step' tax system, in particular payroll tax.

CPA Australia notes that payroll tax receipts in the State Budget papers are estimated to be $266 million in 2008-09; a 6.7 per cent increase on the current year.

'At the end of the day the government is asking businesses to pay more payroll tax in 2008-09 and this is an unwelcome impost on Tasmanian businesses to the tune of $16.6 million,' Mr Viney said.

'Whilst welcoming the harmonisation of the payroll tax arrangements, we strongly encourage the government to align Tasmania's tax-free threshold and rates of tax more closely with those of Victoria and NSW.'

Other concerns for CPA Australia focus on land tax collections which are estimated to be 13.8 per cent higher in the budget year due to forecast increased property values arising from recent revaluations. CPA Australia believes this to be an additional burden on the real estate industry, businesses and working families in Tasmania.

CPA Australia also commends the Tasmanian Government's initial commitment to fund climate change initiatives.

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