Payroll tax reform and skills top state budget wish-list from WA businesses

CCIWA has urged the Cook government to deliver much-needed payroll tax relief to businesses, boost the state’s defence industry and address the housing crisis in this week’s state budget.

The budget is the first to be delivered by Treasurer Rita Saffioti and the last before Western Australians head to the polls in March 2025.

In its pre-budget submission, CCIWA highlighted payroll tax relief as the number one issue impacting WA business.

CCIWA Chief Economist, Aaron Morey, said the pain inflicted by payroll tax is even starker in the context of a cost-of-business crisis.

“Every household knows the cost of things has gone up and the same is true for businesses across every sector, who are paying more for the things they need to operate,” he said.

“In most cases, these cost increases can’t be fully passed on to consumers, and in sectors where spending is largely discretionary, price increases are off the cards entirely.

“Small and family businesses have watched their profits shrink over the past 18 months.

“There isn’t much a state government can do to tackle inflation-related price increases, but they can do something about payroll tax.”

More than a quarter of employing businesses in WA pay payroll tax, and on average they are paying more than an identical business in any other state.

“Earlier this year, we joined forces with a number of key industry and employer groups in WA to call for payroll tax reform, which shows the impact this tax has across all sectors of the economy,” Mr Morey said.

CCIWA also called for action to address WA’s ongoing housing crisis, which is hurting families and having an impact on local economies.

“All across WA, but particularly in places like the Pilbara where a huge amount of our state’s economic activity is, businesses are really struggling to attract workers because of the availability and cost of housing,” he said.

The submission also urges the WA Government to continue to advocate strongly for sensible regulation at the Federal level, including in relation to proposed environmental reforms which could blow-out the cost and timelines for major projects in WA.

CCIWA has also called for more investment in WA’s defence industry, as Perth prepares to play a significant role in the AUKUS defence pact.

“We’d like to see more investment in Defence West so it can be more competitive with other states who are vying for defence-related contracts,” Mr Morey said.

“WA needs a reliable pipeline of work, and it’s vital that there’s strong advocacy for Federal funding for the vital infrastructure that will be needed to support AUKUS, including the development of a large-vessel dry dock at Henderson.

“We’d also like to see a focus on education and training to ensure WA has the local workforce needed to build and maintain nuclear submarines, and additional support for small and medium enterprises to help them to tender for defence-related contracts.”

CCIWA’s budget submission also called for a state-backed venture capital fund to attract more investment to WA start-ups.

“Currently, WA gets about 2% of the total venture capital spend in Australia,” Mr Morey said.

“We think there’s huge potential for WA in areas like remote operation, bio and medical technology, space and defence if the Government is willing to support those start-ups.

“We’ve proposed a $200 million fund over ten years, which would operate like similar schemes in New Zealand and Israel with strict funding and governance arrangements and at arm’s length from Government.”

CCIWA has urged the State Government to address the skills crisis by developing targeted programs to upskill trade qualified workers, strongly advocate for additional skilled migration into WA and removing barriers to workforce participation for under-represented cohorts such as women and people with disabilities.

The Government should also review the indexation rate applied to the Community Services sector to ensure it is keeping pace with the increased cost of delivering services.

“Given the strength of the WA economy, we would expect that no new taxes would be introduced in this budget,” Mr Morey said.

“Any additional taxes would be damaging to the economy, as well as households and businesses.”

The submission also called for more support to help small and medium sized enterprises and heavy industry decarbonise, reform to retail trading hours and a boost in funding for international trade offices.

Read the full budget submission here: CCIWA-2024-25-State-Pre-Budget-Submission.pdf

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