A goose can only be plucked so far

Eighteenth-century French statesman Jean-Baptiste Colbert is often quoted as saying: “The art of taxation consists of plucking the goose so as to obtain the most feathers with the least hissing.” 

The metaphorical goose in this story – regionally-based Queensland small business – has only stopped hissing because it is bleeding out and on the brink of death.

Income tax, company tax, FBT, GST, superannuation, payroll tax, council rates, combined with recent Federal Government changes to capital gains tax and trusts, and no indexation on virtually any tax thresholds at any level of government, it is a miracle that anyone can afford to run a business these days, let alone employ people!

On a broader scale, when you take into account all the other regulatory risks that are out there, and growing relentlessly each year, is it any wonder that regional employers think no one cares about them? That no one understands the risks they take? That the employment and income they provide in their communities is just taken for granted?

In the grand scheme of things, eligibility for a regional employer discount on payroll tax is small beer, but it is emblematic of the lack of understanding from governments on how businesses operate and what it takes to run them.

In the 2019-20 Budget, Queensland Treasury had a key priority of: “Create jobs in a strong economy particularly in our regions…” A regional employer discount was introduced by former Queensland Treasurer Jackie Trad in 2019. It was sold at the time as “…delivering a 1 per cent discount for businesses that have more than 85 per cent of their employees outside of South East Queensland…”

The reality is, the discount is much more restrictive than it first appears. Eligibility is determined by where a business is based, meaning neighbouring farms can be just kilometres apart and receive completely different outcomes. Adding to the complexity, major regional production areas like the Lockyer Valley and Toowoomba are not considered ‘regional’ under the scheme.

The definition of an eligible employee is also very restrictive: “A regional employee is someone whose principal place of residence is in regional Queensland. Transient and temporary accommodation does not qualify…” What this boils down to is that very similar businesses get treated differently depending on where they (and their workers) sit on a map. That’s fundamentally unfair.

While the discount settings were introduced by the former Labor Government, the current LNP Government has shown no willingness to review them – therefore, it now owns the policy. In the last Queensland Budget, Queensland Treasury no longer lists regional economic growth or job creation as priorities. This is curious to say the least – especially given Queensland is the most decentralised state in the nation.

The simple fact is, we need this regional discount setting reviewed – not because it will lead to any revolutionary change to the operating environment – but because it is just the tip of the iceberg in improving it. If we can’t get a simple review happening here – then I’m afraid that the goose will stop hissing forever, leaving our whole state worse off.