Households and businesses back jobs tax cuts to grow jobs and wages

Western Australian businesses, households and peak industry groups have all overwhelmingly thrown their support behind the Chamber of Commerce and Industry WA’s (CCI) pre-budget submission call for the State Government’s tax on jobs – payroll tax – to be cut by the State Government as a priority.

Patterson Research Group state-wide polling of 815 West Australians across the State, commissioned by CCI, has revealed that 73 per cent of West Australians believe the State Government should prioritise reducing its tax on jobs in the upcoming May Budget to help create WA jobs

This is backed by polling of 258 WA businesses, with 77 per cent believing that the Government needs to do more to create new jobs and 82 per cent agreeing that reducing the payroll tax burden should be a State Government priority in the May budget.

The polling comes on the back of WA’s concerning long-term unemployment problem, with the total number of West Australians in employment falling for six consecutive months and the State’s unemployment rate once again increasing to 6.1 per cent in trend terms. By comparison, the total number of Australians in employment nationally has been growing every month for more than five years.

WA has the highest payroll tax burden of any State Government and the second highest unemployment rate. It is more expensive to create a job in WA than any other state because of this tax.

More than two-thirds of WA businesses would employ more staff, increase wages, add additional hours of work or reinvest in their business, which creates more jobs, if their payroll tax bill was cut. Just 15 per cent of businesses and 22 per cent of households believe a reduction in payroll tax would not increase the likelihood of wage rises in WA.

When we want people to smoke and gamble less we increase taxes on smoking and gambling, so if we want small businesses to create more jobs we should reduce the tax on WA jobs.

CCI’s 2019-20 Pre-Budget Submission calls for the Government to increase the payroll tax threshold by $100,000 to $950,000 to create almost 900 jobs in the first year alone and boost the State’s economy by $283 million. This is supported by peak WA industry groups, including AMEC, CME, Property Council WA, RCCI WA, REIWA, Tourism Council WA and Western Roads Federation.

WA has become more dependent on payroll tax than any other state because the WA Government kept a greater share of this revenue, instead of it being siphoned off to other states through the old GST distribution. Now that the GST distribution has been fixed that has all changed.

To achieve both job creation and budget repair, the Government must focus its upcoming Budget on supporting small businesses to invest in WA. Four out of five WA jobs are created by business, which means it’s more important than ever that WA businesses are supported with the right policy settings to get on with the job of boosting productivity and creating jobs, which benefits us all.

CCI urges the Government to act now to turn WA’s high unemployment rate around. Action must be taken if we want West Australians to not only have a job but to feel secure that they will keep it. To read CCI’s 2019-20 State Pre-Budget Submission click here.

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