Payroll tax a ‘roadblock’ to 900 new WA jobs

The West Australian, Monday, January 23, 2017:

The Chamber of Commerce and Industry claims a payroll tax break could create almost 900 jobs in WA and provide the State with a $280 million benefit.

Research commissioned by the CCI says lifting the threshold from $850,000 to $950,000 could directly create 278 jobs and 602 indirectly.

The research said that would help 10,000 to 12,000 local businesses and would cost the State Government $47 million in lost revenue.

It would provide a $283 million benefit to the State through increased employment and business investment.

CCI chief executive Deidre Willmott said payroll tax acted like a break on employment, with small businesses refusing to hire more workers once they approach the threshold.

“The current jobless rate of 6.6 per cent is still the second-highest in the country and miles ahead of the national average of 5.8 per cent,” Ms Willmott said.

“Payroll tax is a roadblock to employment and allowing it to continue while nearly 100,000 West Australians are out of work is simply unacceptable.

“The WA business community is calling on all major parties to commit to meaningful payroll tax reform as an immediate priority in the next term of government.”

Small and medium businesses have pushed for significant payroll tax relief, but previous governments have only tinkered with the policy.

The CCI said that, at a minimum, payroll tax should immediately be indexed to inflation to prevent further bracket creep.

But it also wants the threshold to be increased incrementally by at least $50,000 a year to eventually reach $1.5 million, before the tax is abolished.

The chamber rejected a WA Nationals proposal to fund payroll tax relief through changes to State agreements with BHP Billiton and Rio Tinto, claiming it would hurt small businesses, with most revenue ending up in other States through GST redistribution.