Chief Minister Andrew Barr has moved to counter what he says is a "common misperception" that it's cheaper to do business in New South Wales than the nation's capital, amid claims that companies could move across the border to escape rising commercial rates bills.
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Mr Barr visited Fyshwick renewable energy firm Reposit Power on Monday to talk up the benefits of the ACT government's taxation reforms for local businesses.
The government has lifted the payroll tax threshold to $2 million and abolished stamp duty for commercial properties under $1.5 million, as it phases in higher land-based taxes across the ACT.
The move has led to a spike in commercial rates, angering local businesses who say the impost is threatening their viability. The part owners of the popular Duxton pub said their rates bill had quadrupled to $80,000 in the past five years.
Other Canberra business and property owners have told an ACT Assembly inquiry examining the issue that they were seriously considering moving to Queanbeyan to escape the rates bills.
On Monday, Mr Barr said the argument that it was cheaper to do business in Queanbeyan than in Canberra was a "common misperception" his government was "endeavouring to address".
"People will obviously focus on the one tax that is increasingly, but what they forget - or need reminding - is that it has been offset in the abolition and reduction of other taxes," he said.
"Our process has been of one simplifying our taxation system to utilise the most efficient, least distortionary, tax that is available to our level of government - and that is rates."
Mr Barr said the growth of Reposit Power was proof of the benefits of the government's tax reforms, and its commitment to diversifying the ACT economy with more private enterprise.
The startup was boosted by a $50,000 government grant, and has grown over the past six years from 2 to 35 employees.
Reposit Power has developed what it has described as world's biggest virtual power plant, an evolving model of energy management which uses a network of solar panels and batteries to store power which can, if needed, be exported to the grid.
The company's chief executive, Dean Spaccavento, said his business leased its Yallourn Street premise, and was not aware of the property's rates bill.
Mr Spaccavento said his business' revenue had tripled each year since it started, meaning any rise in commercial rates would have been "outstripped by orders of magnitude".
In addition to the $50,000 grant, and other government subsidies for battery storage technology, Mr Spaccavento said his business had directly benefited from an increase in the payroll tax threshold to $2 million, the highest in the nation.
"In the early days, if we had to pour that cash away early [paying payroll tax] then we would have been in trouble," Mr Spaccavento said.
"You burn a lot of time building a product that people want to buy before you make any revenue. Having that payroll tax kick-in earlier would have been really, really bad for us. It just shortens our runway - how long we can live, how quickly the bank account runs out.
"We now pay payroll tax, but it's fine because revenue is growing."
