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Business relieved with budget news

WA’s business community has breathed a sigh of relief at the State Government Budget handed down last week.

The relief comes because fears of huge tax hikes were not fully realised and the Government, with its $118 million surplus for 2002-03, seems on track to keep the State’s AAA credit rating.

There were hikes to all rates of stamp duty on property conveyancing and motor vehicle registrations, however.

On the property front, a house sale worth more than $500,000 will attract a 5.5 per cent stamp duty, up from the current rate of 4.85 per cent.

The stamp duty on the registration of a motor vehicle worth more than $40,000 has gone up 1.5 per cent to 6.5 per cent.

However, as was the case in the Federal Budget, there were few spending initiatives to boost business.

Both governments seek to rein in spending to deliver surpluses, which could have positive flow-on effect in keeping interest and inflation rates in check.

Chamber of Commerce and Industry chief executive Lyndon Rowe said that, in spite of his initial scepticism, it appeared the Government was beginning to show signs of

being a capable financial manager.

The Chamber of Minerals and Energy also praised the Government’s efforts despite the $110 million in new tax rises, including stamp duty.

“While we are less comfortable with the tax increases, there would certainly have been greater pressure on tax without this discipline,” Chamber of Minerals and Energy chief executive Tim Shanahan said.

The budget is also likely to be welcomed by WA Business News readers.

A phone poll of 129 senior executives commissioned by WA Business News last month showed that just 16 per cent wanted the Government to increase spending on either new initiatives, capital works or health.

But pleas from the 85 per cent of survey respondents to cut or drop taxes went unheeded.

Payroll tax, which the Government has decided to stick with, received the most attention from respondents. More than 35 per cent want Government to abolish it.

However, there has been a small win on the payroll tax front. The Government has scrapped plans to introduce measures focusing on employee-like contractors.

Indeed, some spending cuts are angering several business groups.

While Association of Mining and Exploration Companies chief executive officer George Savell agreed the $118 million budget surplus would help maintain WA’s AAA credit rating, he was concerned cuts to Government programs would lead to greater pressures on the departments servicing mining and exploration industries.

National Party leader Max Trenorden was concerned at the cuts in the Department of Agriculture’s budget by around 7.6 per cent and the 55 full-time jobs that would go from the department over the next year.

“This is madness. This Government doesn’t seem to understand that agriculture is one of the main drivers of the State’s economy,” Mr Trenorden said.

Both WA Farmers and the Pastoralists and Graziers Association had expressed concerns about the cuts to the department’s funding from the previous year.

They believe such cuts are making life much harder for farmers and vital programs such as the one targeting skeleton weed were going by the wayside.

They are also angered by the lack of extra funding for rural roads from either the Federal or State governments.

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