SHADOW Treasurer Brendan Smyth is not impressed by recent manoeuvrings over changes to payroll tax.

“Even with the government’s announcement on the 24th of June that it will extend the commencement date of the Payroll Tax Amendment Bill to the 1st of October 2014, there is still widespread confusion in the ACT market,” Brendan said.

“I continue to receive an overwhelming number of representations from ACT businesses and workers, with some alerting that client organisations will be proactively withholding 6.85 percent for the payroll tax changes come the 1st of July.

“Contracts for the 2014-15 financial year have been finalised and have not factored in the 6.85 percent increase in cost to account for this legislative change. The government did not give prior warning that this was happening until the ACT Budget announcement earlier this month.

“It is unreasonable to expect businesses and contractors to renegotiate contractual arrangements. This is not how good business is conducted.

“Desperate to raise more money to pay for their spending, the government saw a $40 million opportunity to tax the contracting sector and rushed in without proper consultations and due diligence.

“At a time when the economy is slowing down, the government should be initiating measures to give ACT families and businesses certainty and peace of mind. Not a $40 million tax that will leave them short changed and penalised,” Mr Smyth concluded.