Payroll tax threshold must lift then disappear: CCI

07 December, 2016

The WA business community is calling out payroll tax reform as the number one priority for industry heading into the March 2017 state election – the most important election in a generation.

WA business has long believed that payroll tax is a tax on jobs that stops business owners from expanding and stops businesses creating jobs for the state’s workers.

CCI Chief Executive Officer Deidre Willmott says WA businesses feel penalised for being successful and want the payroll tax threshold incrementally increased before ultimately being abolished.

“Payroll tax is holding WA businesses back from growing their businesses and creating jobs. The time for change is now,” Willmott says.

“Payroll tax is particularly damaging for WA’s small businesses – small business owners tell us that as their payroll approaches the threshold, they are putting a stop to new employment altogether to prevent their business from being burdened with another tax.

“At a time when WA has the highest jobless rate in the country, the future state government must provide payroll tax relief for SMEs and give all businesses the legislative support they need to grow, stimulate the economy and create jobs for WA workers.

“Payroll tax should be immediately indexed to CPI to maintain the existing threshold and prevent further bracket creep. Over the next term of government, the threshold should begin increasing incrementally by $50,000 per annum to eventually reach $1.5 million, before being abolished completely.”

Willmott says while payroll tax reform is critical, the proposal by the WA Nationals to fund payroll tax relief through changing State Agreements with BHP and Rio Tinto is a flawed policy that will hurt SMEs throughout the resources supply chain.

“That plan would see 90 per cent of the proceeds go to other states under the GST distribution model.”

Other important priorities

WA businesses also want to see retail trading hours finally deregulated and a long-term infrastructure plan implemented for the state, Willmott says.

“The other thing Western Australians want this Christmas is for someone to set shopping free – WA still has Australia’s worst retail trading laws, with consumers and businesses caught up in bizarre and antiquated rules about when they can shop and what they can buy,” she says.

“This is simply red tape that stifles business activity, hinders job creation and that is totally out of step with the needs of a modern economy.

“Business has also consistently advocated for a long-term infrastructure plan for WA – business owners, investors and the wider community need a 20-year infrastructure vision that goes beyond the short-term political life cycle, so they can plan new investments and make strategic decisions with certainty.

“Industry needs to know when things like roads, rail, ports, bridges, airports and other key items are coming, so they can engage in the consultation process, plan for their businesses’ growth and make  smart choices about the future.”