The 2024-25 State Budget is a missed opportunity for payroll tax reform at a time when WA businesses are struggling with rising costs, says CCIWA Chief Economist Aaron Morey. 

The Budget, handed down today, includes a $3.2 billion surplus in 2023-24 built on the back of significant iron ore royalties, with net debt sitting at $28.6b. A $2.6b surplus is projected in 2024-25.

But there was no relief for WA businesses faced with the highest payroll tax burden in the nation. 

“This Budget is built on a bedrock of iron ore, but for small and family businesses, it’s all glitter and no gold,” Morey says.  

“Just like households, businesses are drowning in rising costs and there is not enough in this budget to address that.  

“Fixing WA’s sky-high payroll tax was one way the Government could have relieved the pressure on small and family businesses, and it is regrettable they have missed the opportunity to do so.” 

The Government expects to reap $5.8b next financial year from payroll tax, increasing to $6.7b by 2028. 

The average WA business is paying $3,285 in payroll tax for each staff member – a 41% increase from 2018-19, and well above the national average of $2,463. 

“In the context of our nation-leading budget surplus, which has been achieved off the back of private enterprise, it’s deeply disappointing to see no mention of reforming this unfair tax in the budget papers,” Morey says. 

Some of the key Budget items include: 

• $26.4m for clean energy manufacturing. Locally-built clean energy components in regional WA, including standalone power systems in Esperance, support for wind turbine manufacturing.  
• $52.3m for $1,000 cash bonus payments to encourage apprentices into construction trades, boost to the Apprentice Tool Allowance. 
• $5m for vacant property rental scheme, offering a $5,000 bonus to people with vacant properties to rent them out. 
• $21m to expand the Group Training Organisation (GTO) Wage Subsidy Program, boosting the State’s building and construction workforce to get homes built sooner. An additional 150 places for apprentices will be funded and made available to GTOs immediately.   
• $35m to deliver development-ready land in the Kimberley, Karratha and Goldfields.  
• $843m for State housing and affordable rentals, including around Metronet precincts.  
• $500m to prepare land in Perth and regional WA for heavy industrial use, including for critical mineral processing and renewable hydrogen projects. A further $200m will be spent on common user infrastructure for critical minerals processing. 
• $36.4m to slash green tape and streamline approvals processes for major projects. It follows a CCIWA campaign that led to an overhaul of WA’s environmental approvals system. 
• A $400 power credit will apply to about 90,000 small businesses, as well as households. 
• Infrastructure investment will total $12b in 2024-25 and $42b across the four year-budget period, mostly into utilities and transport led by Metronet. The Budget includes $102m refurbishment funding for Fremantle Port.

Morey says despite the disappointing result for WA businesses on payroll tax, the State’s finances remain in a strong position thanks to continued high iron ore prices.  

WA will reap an extra $3b in iron ore royalties over the next four years. 

CCIWA welcomes $36.4m in the Budget to slash green tape and speed up approvals for major projects, after highlighting the $318b worth of projects in the approvals pipeline in WA.   

For more on our Budget response see here. 

To be part of WA’s peak business organisation, get in touch via 1300 422 492 or [email protected].