Payroll tax relief is the number one commitment Western Australian businesses want from the upcoming State Election, CCIWA’s latest Business Confidence Survey finds.
The survey of 567 WA businesses for the December quarter found overwhelming demand for payroll tax reform, with three in five (59%) identifying it as the top priority at the March election.
Changes to stamp duty was the second (38%) election priority for businesses.
The result comes as insolvency rates in WA surge towards pre-pandemic levels and an increasing number of businesses report their profit margins are in decline.
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Call for Govt to help struggling businesses
CCIWA Chief Economist Aaron Morey says many small and medium-sized businesses in WA are in distress, and payroll tax relief is one way the State Government could ease the pressure.
“WA really has a two-speed economy as we head into 2025,” he says.
“Overall, it’s in good shape because of the strength of larger businesses, particularly those in mining and construction.
“But it’s a vastly different story for many small and family businesses who have been battered by rising costs over the past two years. In many cases, these businesses are also being hit with the highest payroll tax in the nation.”
Morey says a growing number of small and medium-sized businesses were reaching the $1 million threshold for payroll tax, simply because of the increase in wages costs, which have soared by more than 14% since 2020.
“Aside from those unfortunate businesses that have found themselves hit with payroll tax because their wages costs have pushed them into the liability bracket, there’s a large number who are sitting just below the liability threshold,” he says.
“Those businesses have told us they’re deeply concerned about having to pay this regressive tax, so they’re staying small – not expanding their services, hiring new staff or chasing new innovation.”
Other priorities identified by businesses ahead of the election were measures to attract more workers into WA (30%) and increased spending on infrastructure (28%).
Lift in confidence shows businesses’ resilience
Despite continued concerns about the cost of doing business, both short- and long-term confidence were up in the December quarter.
Rising operating costs and labour shortages have weighed on businesses, with seven in 10 (68%) reporting they have struggled to fill roles requiring a particular skill set.
Three in 10 (29%) businesses expect economic conditions to improve in 2025, while almost half (47%) expect no change and the remaining 24% expect conditions to weaken.
CCIWA’s Economic reports are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more see CCIWA’s Economic Insight page.