Increasing the payroll tax threshold to $2 million and funding for tourism marketing will reduce business costs, encourage employment and support growth in the ACT visitor economy, according to Restaurant & Catering Australia (R&CA).

The 2016-17 ACT Budget sees the tax-free payroll threshold increase to $2 million from $1.85 million, and $7.3 million provided to market Canberra to interstate and international visitors.

R&CA CEO John Hart said the Barr government has kept its word and delivered much needed tax relief to one of the most labour intensive sectors of the economy. 

“The restaurant and catering sector is the largest employer in the tourism industry, employing 9,200 Canberrans in 1,200 businesses.

“As a labour-intensive industry small hospitality businesses feel the pinch of payroll tax more than any other sector. The threshold acts as a barrier to employment, meaning businesses stay inefficiently small and do not grow to their full potential,” said Hart.

Hart said the announcement comes at a critical time as the sector recovers from double digit declines in industry turnover over the past year.

“The ACT saw a 12.5 percent increase in turnover to $750 million for the year ending April 2016. This was the highest rate of growth of all states and territories.

“As confidence returns to the sector, so too will the capacity to hire more staff. More jobs and more shifts is a good outcome for Canberrans and the economy,” Hart said.

The Budget also provides $7.3 million over four years for tourism marketing and airline partnerships.

“Ensuring Visit Canberra is adequately funded is essential to drive visitation from interstate and international source markets.

“The launch of direct flights to Wellington and Singapore in September represents a huge opportunity to grow the tourism pie. Tourism marketing is needed to convert intention to travel into reality. Food and wine is a huge drawcard for international visitors, and one which the territory is well equipped to deliver,” Hart said.  Hart acknowledges that whilst the BBudget proved favourable for the sector, red tape reduction and reducing business costs must remain on the national agenda.

“We need all state and territory governments to come together and deliver real tax reform and harmonise payroll tax thresholds. Payroll tax is an inefficient tax that hinders employment – for every $1 spent, $0.40 is spent on compliance,” Hart said.

“The economic rationale for change is there, we just need governments to be bold enough to make a change.”


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