Opposition demands payroll tax relief

Tax reform is firmly on the opposition’s agenda in light of last week’s budget, with treasury spokesperson Steve Thomas calling for the state government to think big on payroll tax.

Premier Mark McGowan delivered his second budget as treasurer on Thursday with a projected surplus of $5.7 billion this financial year bolstering the state’s finances.

While the premier had pledged some notable measures for businesses, including tax concessions for build-to-rent apartment developers, Mr Thomas today noted the state’s projected take of payroll tax over the forward estimates had grown by $558 million.

Payroll tax revenue is now projected to grow to $4.9 billion in FY2026.

“This demonstrates once again we have massive budget surplus but no plan for economic reform in the area of business taxation,” Mr Thomas said.

Prior to last week’s budget announcement, the state government in April announced an array of adjustments of transfer duties, with the benefits largely flowing to commercial property owners and mining explorers.

And although Mr Thomas welcomed what relief was provided for in the budget, he told Business News he would like to see a 100 per cent rebate for businesses with payrolls of up to $1.5 million, which would then be tapered and phased out completely for payrolls of up to $3 million.

Payroll tax is currently paid at a rate of 5.5 per cent on those worth $1 million or more, with large employers paying a rate of 6.5 per cent.

“The only time you can engage in economic reform is when you have the cash reserve to do so, and our state will never have a better opportunity than right now,” he said.

“We need to take the foot of the hose of small and medium business by cutting payroll tax and addressing the burden of over regulation, so that they can provide the jobs and growth of the future when mining goes back to bust.”