NSW budget to cut payroll taxes by $300m

The NSW government promises its last budget before the 2011 state election will be
broad-based, with tax cuts for business, record health spending and benefits for
families.
Treasurer Eric Roozendaal will hand down the 2010/11 budget on Tuesday after
confirming on Monday businesses will get cuts to payroll tax rates worth more than
$300 million.
Premier Kristina Keneally described it as a "building budget", focused on affordable
housing and infrastructure.
"Tomorrow you will see a budget that builds on the solid foundations laid last year
amidst the global financial crisis," she said.
After two shock ministerial resignations on Friday, and the loss of former transport
minister David Campbell a fortnight ago, the Labor government has struggled to focus
taxpayers' attention on the budget.
But with the state now expected to record a surplus for 2009/10, rather than the
deficit forecast last year, NSW's economic fortunes should grab the headlines on
Tuesday.
"It will have a number of initiatives in it that will help to benefit families and
grow the NSW economy, so we can take full advantage of the recovery," Mr Roozendaal
said on Monday.
"You'll certainly see a record budget for health, you'll see the biggest health
budget in the history of NSW."
Business is already onside, after Mr Roozendaal confirmed payroll tax would be cut
to a two decade low.
The payroll tax rate will be lowered in two stages to 5.45 per cent by January 1,
2011 - the best in 20 years - from a current rate 5.75 per cent.
This includes a previously announced payroll tax cut to 5.50 per cent, from 5.65 per
cent, that will be brought forward to July 1 this year.
"What we do want to do is help businesses that held onto jobs during the global
financial crisis," Mr Roozendaal said.
"By the end of our payroll tax regime we'll have given $4 billion of savings to
business, which allows them to grow their business and allows them to employ more
people."
The payroll tax threshold will also rise from July 1, meaning 10 per cent of
businesses will not have to pay.
The changes go some way to meeting the demands of the NSW Business Chamber, which
wants payroll tax lowered to 5.35 per cent by 2011/12.
"NSW is in competition with the other states to be an attractive place to do
business - cutting payroll tax makes NSW more competitive with Queensland and
Victoria," chamber chief executive Stephen Cartwright said.
NSW Opposition leader Barry O'Farrell welcomed the payroll tax cuts, but said this
would only keep NSW in line with its southern neighbour.
"This is simply a step that has us treading water with Victoria," Mr O'Farrell said.
"It's not a significant reduction, it does not make us more competitive."
The government has made a number of pre-budget announcements over the past few
weeks, including a controversial property tax grab.
The ad valorem charge on property sales of up to 0.25 per cent gets some of the bad
detail out of the way.
It has also flagged a $152 million plan to improve safety at Sydney's Opera House,
$25 million for the state's film industry, the reform of developer levies and
council rates, and $75 million to develop a high-tech defence hub in northwest
Sydney.
Ms Keneally on Monday announced police would get a new PolAir helicopter and 25
mobile police command vans worth $3.3 million, as part of the budget.
Police forensics would also get $12.4 million, which would pay for six new mobile
forensics vehicles, new testing technology and 100 new mobile fingerprint scanners.