Western Australia’s economy remains in a strong position but businesses have been left disappointed, with the budget failing to address the heaviest payroll tax burden in the country.
The budget, which delivers a $3.2 billion operating surplus this financial year and forecasts a healthy $2.6 billion surplus for 2024/2025, delivers a suite of important measures to help households but does not do enough to address the cost-of-business crisis.
CCIWA Chief Economist, Aaron Morey, said thousands of WA businesses had hoped the Government would reform WA’s unfair payroll tax system.
“This budget is built on a bedrock of iron ore, but for small and family businesses, it’s all glitter and no gold,” Mr Morey said.
“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 $5.8 billion next financial year from payroll tax, increasing to an eye-watering $6.7 billion by 2028.
“Payroll tax is a tax on jobs and success. It stops businesses from expanding and it makes WA a less attractive place to do business, which risks investment and innovation.”
WA continues to be the most expensive place in Australia to employ a worker.
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,” Mr Morey said.
The continuation of the $400 electricity bill rebate will be welcome news for around 90,000 small businesses who will be eligible.
Mr Morey said 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 $3 billion in iron ore royalties over the next four years.
CCIWA welcomes $36.4 million in the budget to slash green tape and speed up approvals for major projects, after highlighting the $318 billion worth of projects in the approvals pipeline in WA.
“The State Government’s commitment to streamlining environmental approvals shows it understands how vital it is for major projects to avoid cost blow-outs and delays,” Mr Morey said.
WA’s resources industry will be boosted by a $500 million commitment to prepare land for heavy industrial use, including the processing of critical minerals and hydrogen.
“Increasing WA’s ability to not only mine and export critical minerals but to process them locally will allow us to fully embrace the opportunities that will come with the clean energy transition,” Mr Morey said.
WA’s ongoing skills shortage and housing supply squeeze will be assisted by a $52.3 million program to encourage apprentices into building and construction trades with $1,000 cash bonuses and equipment allowances, and $21 million to subsidise the wages of building apprentices.
“Skilled labour shortages are having a flow-on impact right across the state but particularly in the construction sector, which in turn is adding pressure to housing supply,” Mr Morey said.
“CCIWA continues to work with the State Government on the reforms needed to support small and family businesses in WA.”
