More than 400,000 West Australian employees’ jobs could be impacted following the McGowan Government’s state budget payroll tax hike.

Chamber of Commerce and Industry WA (CCI) Chief Economist Rick Newnham said the McGowan Government may claim that it is only the top one per cent of businesses that will be impacted by their increase to the payroll tax burden, but these businesses employ more than 400,000 people in WA.

“That’s 400,000 people whose jobs are now on the line to pay for the Government’s $435 million cash grab that is being stripped from business to prop up their budget bottom line,” Mr Newnham said.

“The money has to come from somewhere and the first place these businesses will be forced to look is wage freezes, job cuts, and fewer working hours.

“Based on the total amount that will be raised by the hike, CCI estimates that this will cost at least 1,300 jobs. It’s just a question of who it will be.”

Mr Newnham said all businesses in WA would be impacted by the tax hike, either directly or indirectly.

“You cannot quarantine this to one section of the business community. These costs will be passed on through the supply chain to small and medium businesses that are already struggling from the downturn in WA’s economy,” Mr Newnham said.

“To truly protect WA’s small and medium sized businesses, CCI is calling for an increase in the payroll tax threshold of $100,000 – from $850,000 to $950,00 – to help offset the 1,300 jobs that will be lost.

“Research commissioned by CCI found that lifting the payroll tax threshold by $100,000 would create nearly 900 jobs in WA – directly and indirectly – with a $283 million economic benefit to the state.”

Limiting the impact of this tax hike by raising the payroll tax threshold will help stem the loss of jobs for West Australians and boost confidence in the WA business community.

Mr Newnham said CCI is of the firm view that this budget should have focused more on spending restraint, not increased taxes.

“WA is the highest spending government per person of all the states, and already had the highest payroll tax burden in Australia,” Mr Newnham said.

“But instead of bringing spending back into line with the rest of the country, where it is sustainable, the Government will be hitting business with higher taxes.

“With more than 3,000 people leaving WA every quarter, the Government must remove their payroll tax rate hike, or at least partially offset this with an increase in the payroll tax threshold immediately.

“If the Government doesn’t act now, when Australian businesses consider which state to invest in and create new jobs next, they will think of WA last.”