The McGowan Government’s decision to remove the payroll tax exemption for existing employees will halt the upskilling of Western Australia’s future workforce.

Chamber of Commerce and Industry WA (CCI) Chief Economist Rick Newnham said while the rest of the developed world is pushing ahead to develop highly skilled workforces in the digital era, the WA Government’s decision will hinder employers ability 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. The payroll tax exemption for trainees assists employers to retrain and develop their workforce as technology drives rapid changes in the economy,” Mr Newnham said.

“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,” Mr Newnham said.

“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.

“It is crucial that WA’s economy can continue to transition and diversify, particularly in key sectors such as agribusiness, construction, defence, manufacturing, energy, resources and tourism – which requires retraining of the existing workforce.”

A training incentive scheme’s purpose is to incentivise training. Registered Training Organisations have done exactly what is required of them – to tell employers what incentives are available to encourage traineeships which has made a major contribution to maintaining skills in WA.

Before training contracts are registered they are assessed by the State Government to ensure that the arrangement meets the legislative requirements, supports quality training, and in the case of existing workers, supports genuine upskilling that the employee can then implement in their job.

“For the Government to now claim that employers are doing the wrong thing by utilising these incentives is disappointing,” Mr Newnham said.

“Every single traineeship agreement that the Government claims has been abused was reviewed and approved by the State Government.

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