The Nationals WA will lift the payroll tax threshold and reduce the tax rate for small and medium businesses in a move that will support over 11,000 businesses and boost investment and employment across Western Australia.
Leader of The Nationals WA Shane Love MLA said the move will help WA’s small and medium-sized businesses manage the rising cost of doing business.
“The Nationals WA in Government will lift the payroll tax threshold from $1 million to $1.3 million,” Mr Love said.
“We will also introduce a 15 per cent tax rebate for businesses with taxable wages below $4 million, tapering off to businesses at $7.5 million.”
These measures are anticipated to benefit around 11,400 businesses in WA with taxable wages between $1 million and $7.5 million.
“The Nationals WA are proud to support WA’s business community, who have sent a clear message that it’s time for payroll tax reform after years of increasing costs and decreasing confidence,” Mr Love said.
The move follows recommendations put forward by the Chamber of Commerce and Industry WA (CCIWA) in support of payroll tax reform, with modelling showing WA businesses pay more in payroll tax on average than anywhere else in Australia.
“A business paying $3 million in wages in WA would be slugged around $126,000 in payroll tax each year,” Mr Love said.
“A similar sized business in New South Wales would pay just $98,000, and businesses in Queensland, Tasmania and the ACT would pay even less.
“Under WA’s payroll tax arrangements, businesses in WA have less capacity to increase employment, invest in the day-to-day running of their business, or expand their operations compared to those in other States,” Mr Love said.
“This places WA at a significant disadvantage given the cost of doing business in a global economy. It also also makes it harder to attract new businesses to WA, who see our costly taxes as a disincentive to do business here.”
The Nationals WA payroll tax reform has a predicted cost of $292 million per year, but is predicted to generate an economic return of over $850 million annually.
“These costs can easily be accommodated by the GST windfall and will deliver a significant net return to WA’s economy through increased productivity, investment and employment.”
Mr Love said the proposal was anticipated to create around 3,500 direct jobs and impact total employment by up to 7,000 FTE jobs.
“More than two-thirds of WA businesses have identified reforming payroll tax as their highest priority, and The Nationals WA are listening and delivering,” Mr Love said.
“The Nationals WA understand that backing our business community is backing the future of our State.”
