While the State Budget has been deemed bad for business and contained broken promises, former WA Treasurer Eric Ripper says strong action to repair the budget was essential.
Ripper, who will join CCI Chief Economist Rick Newnham at the CCI Post Budget Breakfast, says Treasurer Ben Wyatt had a tough job to do.
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“No Treasurer would want a deficit of $2.3 billion with two more billion-dollar deficits to come. This is money borrowed to pay for current expenses including wages,” he says.
“Nor would any new government want key budget aggregates to be worse than those in Treasury’s Pre-Election Financial Projections Statement.
“But the Treasurer couldn’t choose his starting point and isn’t responsible for the economic circumstances which, absent corrective action, have cut revenue since the election by $5.4 billion.”
“The budget is not yet cured. Ben Wyatt still has to deliver the savings and resolve persistent budget problems in health, prisons and child protection.”
Newnham, however, says the Government’s decision to increase the payroll tax burden on WA’s largest corporations for the next five years goes against all sound economic advice.
Businesses with a nationwide payroll of more than $100 million will be squeezed of $435 million over the forward estimates.
The progressive payroll tax scale will be implemented from July 1, 2018, and will see employers with payrolls between $100 million and $1.5 billion pay a higher tax rate of 6 per cent on the proportion of their payroll above $100 million.
Businesses with a payroll exceeding $1.5 billion will also pay a higher tax rate of 6.5 per cent on the proportion of their payroll above $1.5 billion.
►Don’t miss Newnham’s and Ripper’s post budget rundown as they share their views on the impacts for business. Book your tickets to CCI’s Post Budget Breakfast on September 13 today.