Premier Mark McGowan is ‘very keen’ on working with WA’s peak business body CCIWA on possibly raising the payroll tax threshold to help small and medium enterprises, pending a resolution to the State’s GST woes.

Speaking to a packed CCI breakfast on Wednesday, McGowan said he ‘hated’ payroll tax, which kicks in when a business’ payroll hits $850,000, and commented on the increases to WA’s biggest employers implemented in the recent State Budget.

“Payroll tax is regrettable, it’s a five-year payroll tax increase, it affects less than one per cent of businesses in WA, those with payroll of over $100m per year,” he said.

“We’re very keen to exclude SMEs from it. I’m very keen, pending GST resolution, to have that ongoing dialogue with the CCI, Deidre and her successor, about what we can do for small and medium-sized enterprises, in particular, about the threshold.

“Personally, I don’t like payroll tax. In fact I hate payroll tax, but it is one of the levers that’s available to the State."

CCI has criticised the State Government's move to increase the tax for the state's biggest employers, which will impact the entire supply chain and jobs growth.

CCI modelling reveals between 1,334 and 5,297 WA jobs will be lost in the first year and at least $510 million will be wiped from economic output.

“We don’t have many of those, but we made sure that in terms of our budget repair measures we share the burden as much as possible. I couldn’t put all the burden onto the public sector and families, we had to share the burden of fixing the budget across the community which is why we looked to the payroll tax measure,” McGowan says.

He spoke about public sector changes the Government was implementing to save money, including reducing the number of Government departments from 41 to 25 and offering voluntary redundancies.

He also reaffirmed his commitment to a flat $1000-a-year wage increase for public sector workers despite strong pushback from the WA Police Union.

“The police union has had a history of always getting its way. We made the decision that will not happen,” he said.

“We cannot allow our wages policy, in the light of the financial situation that we confront, to be undermined.

“The instant it is, the flood gates are open and the wages policy disappears and all those savings disappear.”

When it came to the GST, McGowan offered a scathing assessment of his east coast counterparts.

“We get 34 cents for every dollar we put in. If it was New South Wales or Victoria getting 34 cents for every dollar they put in, it would be a revolution. The country would be in revolt,” he said.

“If it was Queensland, they would be setting the place on fire.

“NSW is now getting 88 cents, they think that’s an outrage so they’re on board. Victoria is a bit more on the fence.

“If you talk to Tasmania, South Australia, Northern Territory, Queensland, there’s not one iota of gratitude about what has occurred in terms of the GST system.”

McGowan said WA could not fellow states for a fix of the GST system and change had to come from the Commonwealth.

He encouraged the Federal Government to take on board and implement the recommendations from the draft Productivity Commission report released recently which supported CCI’s proposal to implement partial equalisation model of GST distribution.

On a lighter side to the breakfast, CCI Chief Executive Deidre Willmott asked McGowan what had surprised him most about being Premier.

McGowan said he was surprised at the positivity he had received while meeting the public and walking through shopping centres but quipped he hadn’t been to the Claremont Quarter yet.

Wilmott said it was her local shopping centre and she would arrange a warm reception for him.

McGowan also wished the outgoing Wilmott, who resigned recently and will leave the Chamber early next year, well on her life after CCI. 

Hear from WA Premier the Hon Mark McGowan MLA as he outlines how the WA Government is fighting for a greater share of GST at a CCI-hosted breakfast on October 31. Get your tickets here.