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Budget Paper No.2 Fiscal and Economic Outlook 2008-2009



Budget Paper No.2 Fiscal and Economic Outlook 2008-2009

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Tabled paper 1293


Tabled papers for 10th Assembly 2005 - 2008; Tabled Papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT; Tabled Papers




Tabled By Delia Lawrie


Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.




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2008-09 Budget 62 Territory Own-Source Revenue NSW Vic Qld WA SA Tas ACT NT Average Threshold ($M) 0.60 0.55 1.001 0.75 0.50 1.01 1.25 1.25 0.86 Rate (%) 6.00 5.00 4.75 5.50 5.00 6.10 6.85 5.90 5.64 1 Queenslands threshold diminishes so that no exemption is provided for employers with wages over $4 million. Source: State legislation and information available as at 30 April 2008 However, this does not present an accurate comparison with other payroll tax regimes as the rate and the threshold exemption need to be taken into account to get an effective payroll tax rate. The effective rate, from 1 July 2008, is illustrated in Table 6.4. Wages NSW Vic Qld WA SA Tas ACT NT $M % % % % % % % % 2 4.2 3.6 3.2 3.4 3.7 3.0 2.6 2.2 4 5.1 4.3 4.8 4.5 4.4 4.6 4.8 4.1 5 5.3 4.4 4.8 4.7 4.5 4.9 5.1 4.4 6 5.4 4.5 4.8 4.8 4.6 5.1 5.4 4.7 10 5.6 4.7 4.8 5.1 4.8 5.5 6.0 5.2 20 5.8 4.9 4.8 5.3 4.9 5.8 6.4 5.5 Source: Northern Territory Treasury and available information as at 30 April 2008 From 1 July 2008: the Territorys payroll tax regime is more favourable than all other jurisdictions for small to medium businesses with wages up to $5 million a year; and the payroll tax burden for larger businesses in the Territory is more favourable than, or comparable with, New South Wales, Western Australia, Tasmania and the Australian Capital Territory. Payroll tax legislation is similar in operation in most states, although it is not identical. The differences between state and territory payroll tax laws are generally minor in nature and lead to some differences in administration. Moreover, there are separate administrative arrangements in each state and territory for the collection and payment of the tax. These differences create a requirement for taxpayers that employ workers in more than one state or territory to return payroll tax in each of these states and territories. These arrangements add to the compliance cost for these taxpayers in paying payroll tax. The majority of the Northern Territorys payroll tax is collected from taxpayers that employ in a number of states and territories. Accordingly, it follows that there would be compliance cost benefits for these taxpayers arising from the harmonisation of payroll tax legislation and administration. In March 2007 the state and territory Treasurers issued a joint media release agreeing to: adopt common payroll tax provisions and definitions in eight agreed areas by 1 July 2008; and move towards adopting a range of payroll tax harmonisation measures agreed between New South Wales, Victoria and Tasmania. Table 6.3: State and Territory Payroll Tax Rates and Exemption Thresholds Table 6.4: Effective State and Territory Payroll Tax Rates at Various Wage Levels