WA businesses that take on apprentices or trainees will not need to fork out payroll tax on wage subsidies for those workers under a new State Government incentive scheme.

The Federal Government recently announced 50 per cent wage subsidies for employers hiring apprentices or trainees, covering wages up to $7000 a quarter.

WA Premier Mark McGowan said making businesses that hired workers under this scheme exempt from payroll tax on the subsidy was part of helping them recover from COVID-19.

“This payroll tax exemption will ensure Western Australian businesses are able to receive the full benefit of the Boosting Apprenticeships Commencements scheme,” he said.

Manager of CCIWA’s Apprenticeship Support Australia Lena Constantine welcomed the move, saying anything to boost apprentice numbers in WA was a positive.

“Since we had our last boom, we peaked at 34,000 commencements in the State in 2012. In the last financial year, there were just over 16,000 commencements,” she said.

Constantine said there was a need to invest in developing skills in WA given the recent uptick in iron ore and gold prices and increase in mining activity.

“The resource sector goes first – they start sucking up the skills and the labour that they can, and then all the other industries are not scrambling to get people with the closed borders and issues around labour movement,” she explained.

“We are caught short … so having all these incentives to put on trainees and apprentices is great, because it’s been missing for a long time.”

The State Government estimates wages for up to 5,600 trainees would be eligible for the exemption, equating to about $4 million in tax relief.

The subsidy applies to workers employed between October 5, 2020 and September 30, 2021.

CCIWA has called for wholesale reform of payroll tax, which would remove the competitive disadvantage in WA, bring about more WA jobs and decrease the burden on business.