Election 2017: Payroll tax headache

11 January, 2017

Payroll tax topped the list of concerns when CCI met with business owners in Balcatta, Forrestfield and Wanneroo to find out what government rules or regulations are them up at night.

Business owners across the board reported that SMEs are avoiding employing more workers to make sure their business doesn’t get hit with the costly tax.

Red tape, insufficient local content, a lack of training for young people and inadequate infrastructure also ranked highly as issues impeding business growth and hindering job creation.

CCI Director of Advocacy Cath Langmead says whichever party forms the next State Government must create a business-friendly economic environment so employers can hire more workers.

“Business creates jobs – not governments – so it is critical that our political leaders make WA a place where business can succeed,” she says.

“Successful, growing businesses create jobs for WA workers, but business owners across Balcatta, Forrestfield and Wanneroo have told us that payroll tax is deterring business owners from growing their operations and hiring more people.”

Businesses told CCI they would put a stop on employment as they approached the payroll tax threshold. CCI has called for incremental increases to the payroll tax threshold before abolishing the tax altogether.  

“At a time when our state’s unemployment rate is the second highest in the country, it is vital the future State Government prioritise payroll tax reform to give business owners the boost they need to employ more workers and stimulate the economy,” Langmead says.

“Payroll tax should be immediately indexed to CPI to prevent 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 the tax is abolished completely.

“While payroll tax reform is critical, it is important to note that 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 and will see 90 per cent of the proceeds go to other states under the GST distribution model.”

Langmead says business owners in these areas can put their concerns directly to their local candidates at CCI-hosted debates in each seat in February.

“The concerns of business must always remain front and centre of the political conversation – with just weeks to go before the state election, CCI has invited candidates from the major parties to meet with business owners in Balcatta, Forrestfield and Wanneroo and answer their questions directly,” Langmead says.

“I strongly encourage all business owners to stand up for local industry and bring a spotlight to the issues that matter in your area – the candidate debates in February will also be followed by a few drinks and networking at the end of hard day’s work.”