Payroll tax in WA lobby groups’ sights

A rollcall of peak Western Australian industry groups is urging WA Treasurer Rita Saffioti to take a razor to payroll tax in this year’s state budget to help businesses struggling to cope with escalating costs.

Changes proposed by the lobby groups include raising the payroll tax threshold from $1 million to $1.3 million and introducing a 15 per cent rebate above $1.3m which would taper off for larger firms.

The move comes after the WA Nationals last week revealed, if elected next year, they would tackle payroll tax through a policy which mirrored the above proposal.

A joint statement released by the eight business and industry groups argued businesses were struggling under the weight of rising costs just as much as families.

The statement was signed by the Chamber of Commerce and Industry of WA, Australian Hotels Association WA, Tourism Council WA, and Australian Medical Association WA, Association of Mining and Exploration Companies, National Retail Association, Housing Industry Association, and Franchise Council of Australia.

“The unfair payroll tax system is threatening WA’s reputation as a place to invest and do business,” the statement read.

“Industry groups have proposed a sensible reform model aimed at offering much-needed relief to small and family businesses, while protecting the budget bottom line.

“WA businesses across every industry have consistently highlighted rising costs as the number one barrier to growth over the past 12-18 months, surpassing skills shortages, weak demand and supply chain challenges.”

CCIWA research in 2023 revealed the proposed payroll tax reforms would boost WA’s economy by $1.34 billion through increased business investment.

WA’s payroll tax is 5.5 per cent for businesses with a wage bill above $1 million.

Modeling released by the WA Nationals last week suggested their reform would benefit about 11,400 businesses, cost $292m a year to implement, and generate $850m a year in economic returns.

“A business paying three million dollars in wages in WA would be slugged around $126,000 in payroll tax each year,” WA Nationals leader Shane Love said.

“A similar sized business in NSW would pay just $98,000, and businesses in Queensland, Tasmania and the ACT would pay even less.”