The Illawarra’s leading business organization the Illawarra Business Chamber has strongly welcomed the State Government’s decision to stand by its promised cuts to payroll tax.

“This is a victory for commonsense and we congratulate the government for holding its nerve. Payroll tax is a tax on jobs and a disincentive to business to keep hiring” Illawarra Business Chamber CEO Mark Grimson said.

“With the NSW economy contracting, now is not the time to hit employers with higher taxes to fund shortfalls in the Budget”, Mr. Grimson said.

"The payroll tax relief promised in the June Budget is good for business, good for the Illawarra and good for jobs.”

“This relief is long overdue and should not be scaled back or delayed in any way.”

 “Illawarra businesses are resilient, but with the state’s economic growth now in reverse, consumer confidence in decline and business battling high transport, fuel and interest rate costs, employers need encouragement to continue the great job they are doing in providing jobs.”

The proposed $1.9 billion in cuts to payroll tax over the next four years will see the rate reduced to 5.75% from 1 January 2009, 5.65% from 2010 and 5.5% in 2011. The current $600,000 threshold will increase to $623,000 from 1 July 2008 and will rise thereafter in line with Sydney CPI.

"The IBC in conjunction with NSW Business Chamber has campaigned for these cuts for many years. Ripping them away from business now would have been a backwards step for businesses across NSW”, Mr. Grimson said.

“The decision to index the payroll tax threshold to Sydney CPI will ensure that the NSW payroll tax system stays competitive.”

The Illawarra Business Chamber’s members employ over 42000 people across the Illawarra.