Businesses confused about the McGowan Government’s decision to remove the payroll tax exemption for existing employees should contact Apprenticeship Support Australia.

Last week, Treasurer Ben Wyatt announced it would redesign the scheme over a two-stage process.

Effective from December 1, 2017, payroll tax exemptions will be limited to all apprenticeships and to traineeships undertaken by new employees less than $100,000 per annum at the date of lodgement of the contract with the Department of Training and Workforce Development.

Existing worker contracts lodged before December 1, 2017, will continue to be exempt, providing the employee's annual wages do not exceed $100,000. 

The State Government says savings will be redirected to fund 43,350 training places over the forward estimates. But CCIWA Chief Economist Rick Newnham says the decision puts at risk the upskilling of WA’s future workforce.

Newnham says that while the rest of the developed world is pushing ahead to develop highly skilled workforces in the digital era, the decision will hinder employers’ abilities to upskill and retrain their existing workers and stay at the cutting edge.

“Automation will continue to have widespread impacts on employment in WA, particularly for older employees," he says.

"The payroll tax exemption for trainees assists employers to retrain and develop their workforce as technology drives rapid changes in the economy.

“The Government has conducted no industry consultation despite this decision inevitably leading to sub-standard training in WA – below the national accredited standard.”

Since 2012, there has been a steep decline in the number of people starting apprenticeships and traineeships across WA, reducing by 10 per cent in the past year alone.

At the same time, the McGowan Government has reduced the number of occupations on the skilled migration list from 178 to 18.

“Employers tell us that if training numbers continue to decline, we will see skill shortages within three years,” Newnham says.

“To achieve a skilled local workforce, the Government can’t afford to put their foot on the pipeline of traineeship support while also reducing the skilled migration list – this shuts down every option available to employers.”

Newnham says CCI agrees that traineeship incentives, such as the payroll tax exemption, should not be greater than the actual cost of training, but instead of decimating future workforce skills the Government should first consult with industry.

“CCI is calling on the Government to immediately reverse its decision to remove the payroll tax exemption for existing employees,” he says.

“The Government should then undertake widespread consultation with industry regarding the best transition to the Government’s proposed grants scheme.”

►To find out more about how the changes impact your business contact Apprenticeship Support Australia on 1300 363 831 or fill in an enquiry form here and a member of the team will be in touch.