Payroll tax uncertainty

A LOCAL food wholesaler is rallying behind calls to reform the state’s payroll tax system, which he says is stopping him from employing more workers.

Devings Fine Foods manager Mike Croft said his food wholesaling business recently went from 14 to 18 workers - but added this was not an easy decision to make.

“We have been on the cusp of paying payroll tax, for years we have just been under,” he said.

“We agonised for a long time if we should employ more staff, because we need them, but it did put us over the threshold.”

Businesses with payrolls of up to $1.5 million are currently entitled to receive a temporary payroll tax rebate of up to $41,250 - with the rebate announced by the Barnett government in the 2012-13 state budget.

But Mr Croft said the temporary nature of that rebate was unsettling for him and other small business owners.

“There’s no sign this will be repeated (next year),” he said.

“If not, I will have to pay $30,000 out of my own pocket, which is money I just don’t have.

“Believe it or not, my wife and I are the lowest paid workers in the business - that’s half of our salary being taken, all for hiring four extra people we needed.”

The Chamber of Commerce and Industry WA has called on the government and Labor Party to permanently double the threshold at which payroll tax kicks in, from $750,000 to $1.5 million per year.

CCI chief executive James Pearson said small businesses would continue to suffer if the threshold wasn’t lifted in line with growing income levels.

“We have over 70,000 small businesses that employ the bulk of people in WA - they are an essential driver of our economy,” Mr Pearson said.

“We should not have taxes which penalise small businesses for employing people or for recognising good workers and rewarding them with pay increases.”

Mr Croft said he knew of other businesses in the same situation as his.

“Carbon tax means nothing to me, a bit of an increase in the electricity bills. The payroll tax is the biggest danger, and the intelligent solution is not to have a rebate but to change the threshold,” he said.