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Following meetings with members of industry last week, NSW’s Shadow Minister for Finance has “committed to place a moratorium” on the payroll tax issue until after industry engagement, the FBAA has said.
While the NSW government is in caretaker mode ahead of the state election on 25 March, members of industry have been ramping up engagement with ministers and politicians to outline the damaging ramifications of the payroll tax issue plaguing aggregators and broker groups.
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Revenue NSW – the division of the NSW government that collects taxes – is currently seeking backdated payroll tax from up to eight years ago, amounting to tens of millions of dollars.
The office has been issuing penalty notices to aggregators for failure to pay the tax, as it suggests that brokers fall under the ‘relevant contract’ provisions.
While the tax is self-assessed, the industry’s understanding of the application of the law and the revenue office’s application differ (and are currently the subject of legal proceedings from Loan Market Group).
Last week, several aggregators and associations met with politicians from both sides of the political spectrum to outline the financial impost the tax would have on the broking industry (and therefore on borrowers).
According to Peter White AM – managing director of the Finance Brokers Association of Australia (FBAA) –Anoulack Chanthivong, NSW Shadow Finance Minister, suggested he would be open to placing a moratorium on the issue until further stakeholder engagement has been had on the matter.
Speaking to The Adviser, Mr White said: “During this past week I held meetings with both sides of NSW Politics [sic]. Each had an outcome that was as successful as could be expected given that NSW has now entered caretaker mode due to the coming election, meaning no decisions will be made until a new government is formed after March 25.
“The FBAA and leaders of five aggregators spoke to the shadow minister for around an hour with strong positive conversational engagement. We achieved a high level of support from Labor’s Shadow Minister for Finance Anoulack Chanthivong, with a commitment to undertake stakeholder engagement between industry, NSW OSR and the State Government should Labor be elected.
“He also committed to place a moratorium on any further OSR progression until this engagement has determined an outcome. If the consultation engagement outcome is not favourable, he understands the need for industry to have a time period to make adjustments to their commercial undertakings, and this has been positioned as being three years,” he said.
Mr White highlighted both Mr Chanthivong and Financial Services Minster Stephen Jones have both used a mortgage broker for their home loan needs – “so they get it”.
The FBAA head said that the association and two aggregators had also held video meetings with the NSW state government, including NSW Treasurer Matt Kean MP and two of his senior advisers.
“Although our time was very limited with him, I felt we achieved a very good – and better than expected – outcome that supported our position in principle, which was to holt the current undertakings of the OSR and to engage with industry in consultation,” Mr White said.
“We will be able to proceed further and revisit these discussions with the next government – whoever it may be – after the March elections in NSW.”
The Adviser has contacted Mr Chanthivon’s office for confirmation of the commitment to place a moratorium on the payroll tax issue and engage with industry but had not received a response at the time of publication.
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