Lifting the payroll tax threshold by just $100,000 to $950,000 could create nearly 900 jobs for WA, according to independent research from the Chamber of Commerce and Industry of Western Australia (CCI).
CCI-commissioned research has found that lifting the threshold from its current level of $850,000 could directly create 278 jobs and indirectly create 602 jobs – an estimated economic benefit to the state of about $283 million.
View the full report online.
CCI Chief Executive Officer Deidre Willmott says the business community has long called for meaningful payroll tax reform.
She says given WA’s soaring jobless rate, the time for real change is now.
“If we can create 900 jobs through a $100,000 lift in the threshold, think of how many West Australians could get back to work if we abolished this tax on jobs completely,” she says.
“A $100,000 threshold lift would directly benefit all SMEs with a payroll of between $850,000 and $7.5m per year, which is between 10,000 and 12,000 businesses.
“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.”
Willmott says payroll tax is a roadblock to employment and allowing it to continue while nearly 100,000 West Australians are out of work is 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.”
The report revealed an increase in the payroll threshold would save businesses $47m, but the total economic benefit of $283m outweighed the small hole in the budget.
“Lifting the threshold would be a relatively small, targeted investment that would have minimal impact on the budget,” Willmott says.
“At a minimum, CCI and the WA business community are calling for payroll tax to be immediately indexed to CPI to prevent further bracket creep.
“Over the next term of government, the threshold should begin increasing incrementally by at least $50,000 per annum to eventually reach $1.5 million, before the tax is abolished completely.”
►For a complete overview of the research findings, download the Payroll Tax Inquiry report here.