The Victorian government last year announced it would give payroll tax cuts to businesses based in regional areas, leading Seeley International to decide to relocate from Albury to Wodonga in July.

NSW politicians are now looking into using the idea for possible tax cuts of their own, which could also be specific to regional areas.

Mr Aplin is the deputy chair of the committee conducting an inquiry into zonal taxation, but in speaking to Parliament this week, he suggested tax cuts were not the way to stop businesses leaving the state for a better deal.

He said the Victorian government was pushing to attract business and families across the border with better first home incentives, and a regional payroll tax 2 per cent below NSW “with a mere $100,000 threshold difference”.

“Yet, for all the noise and fury, what do I see on the ground? A large manufacturer shifts from Albury to Wodonga, and Bunnings moves its trade centre from Wodonga to Albury,” he said.

“State taxes comprise a raft of exclusions and concessions.

“Creating a local economic zone for Albury would have to include Wodonga, and is that notion even in the room let alone on the table?”

Mr Aplin said businesses looked at electricity and water prices, NBN issues, and whether an area had a skilled workforce – just as much as they looked at tax concessions.

He claimed workforce issues were a result of pressure on TAFE funding and barriers to financial support for students from the federal government.

“Businesses state that the lack of an educated workforce becomes apparent when they attempt to employ skilled, or motivated unskilled, staff,’ he said.

Albury Council made a submission to the inquiry in 2006 and suggested the NSW government “match or better the Victorian offer for payroll tax, even if only applied to a defined border zone”.

The inquiry has called for further submissions.