Payroll tax relief has unsurprisingly topped the Chamber of Commerce and Industry WA’s state budget wish-list, ahead of the state’s unveiling of its 2024-25 books on Thursday.
Payroll tax relief has unsurprisingly topped the Chamber of Commerce and Industry WA’s state budget wish-list, ahead of the state’s unveiling of its 2024-25 books on Thursday.
The State Budget will be the first delivered by treasurer Rita Saffioti, who took over from Mark McGowan in June 2023, and the last before the state goes to the polls in March next year.
It will not be the first time CCIWA has gone into bat for payroll tax relief, which consistently ranks as the Chamber’s number one item on its pre-budget agenda.
CCIWA chief economist Aaron Morey said the pain of payroll tax was made sharper by the rising costs of doing business.
“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.”
Addressing a CCI event in February, Ms Saffioti dodged questions around payroll tax.
In March, the WA Nationals have committed to a scale back should they form government, though this appears unlikely.
Later that same month CCIWA was part of a diverse group of eight business and industry groups who issued a joint statement calling on the government to do more around the tax.
It included the Australian Hotels Association WA, Tourism Council WA, the Australian Medical Association WA, the Association of Mining and Exploration Companies, the National Retal Association, the Housing Industry Association and the Franchise Council of Australia.
The CCIWA claims more than a quarter of businesses in the state pay payroll tax, and on average they pay more than equivalent businesses in other states.
Payroll tax generated $5 billion for the state last financial year.
Changes were made to the payroll tax rate at the last budget, when a sliding rate levy which heavily impacted companies with wage bills above $1.5 billion was scaled back.
The change was estimated to save the state’s largest employers a modest $230 million and did little at the smaller end of the business scale.
Mr Morey said the strength of the state’s budget meant no new taxes should be introduced.
“Given the strength of the WA economy, we would expect that no new taxes would be introduced in this budget,” he said.
“Any additional taxes would be damaging to the economy, as well as households and businesses.”
Mr Morey said the CCIWA was also hoping for action to address the state’s ongoing housing crisis, which is impacting business and individuals.
“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 organisation threw its support behind the emerging defence sector in WA, calling for greater investment in Defence West to help the state secure its share of a burgeoning defence industry pie.
The status of a dry dock at Henderson – a federal government project – has been clouded for two years.
“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.”
Other requests included a state-backed venture capital fund to stimulate WA start-up investment; targeted upskilling and skilled migration initiatives; and the removal of barriers to workforce participation by people with disabilities and other underrepresented cohorts.
Support for industrial decarbonisation; retail trading hour reform and a boost to funding for international trade offices were also pitched.
The 2024-25 State Budget will be unveiled on Thursday.
